Papafox's Daily TSLA Trading Charts

[Papafox]

Today shorts traded only 29% of TSLA shares, I can't remember in recent times when the percentage was so low. The low numbers suggest minimal opening of new positions, manipulations, and covering. Though ggr has a point with his post, sellers of calls are not regarded as shorts in the chart above (to my knowledge).

 

[Papafox]

Lots of optimism is out there.
* Option_Sniper is expecting a huge breakout: Option_Sniper on Twitter

* Jesselivenomore has a fascinating post about how long consolidations take with TSLA (about 30 weeks). Guess where we are now? Check out the post: Some views on current price action

 

[Papafox]

Today was a big up day for the broader markets. Often on such days TSLA lags behind, but with a strong climb underway since TSLA bottomed out at 294.76 not long ago, TSLA performed similarly to the broader markets. The march up in SP is consistent with a large institution still acquiring shares.

Looking at the technical chart, you can see that the climb of TSLA is bringing it within about $6 of the upper bollinger band. Option_Sniper believes that if TSLA rises above 361 it will climb significantly higher. On the other hand, history suggests we don't typically see TSLA staying above the upper bb for more than 2 days in a row. The upper bb is now bending upward, as is the mid bb. A likely solution between these conflicting inputs is that the SP climb will moderate sufficiently to allow TSLA to remain/return below the upper bb should we reach that point.

Also, I suggest that this rally is at risk if data later in March conflicts with TSLA's goal of producing 2500 M3s/week by quarter's end. OTOH, data supporting that claim would kick the rally to a new ATH. Keep your eyes on the Model 3 production numbers.

Conditions:
* Dow up 399 (1.58%)
* NASDAQ up 84 (1.15%)
* TSLA 357.42, up 5.37 (1.53%)
* TSLA volume 4.3M shares
* Oil 64.01, up 0.46 (0.72%)

 

[Papafox]

TSLA is up about 50 cents in after-hours trading, which is encouraging for tomorrow's action.

Shorts accounted for only 33% of TSLA trading today, which is still unusually low for this stock and suggests minimal manipulation. Take a look at how anemic the mandatory morning dip was today. It lasted only a few minutes and never reached the red. The slight uptick in short activity could suggest increased covering. Consider having over 30 million shares sold short at this price point (most shares are underwater) and then entering a major breakout.

 

[Manton]

Also, I suggest that this rally is at risk if data later in March conflicts with TSLA's goal of producing 2500 M3s/week by quarter's end. OTOH, data supporting that claim would kick the rally to a new ATH. Keep your eyes on the Model 3 production numbers.

Thanks for your input Papafox, i thoroughly enjoy your posts!

InsideEV is releasing delivery numbers end of the week. Some suggested that beginning of the year Tesla deliveries are often low. Would InsideEV's numbers have an effect?

 

[AlMc]

Thanks for your input Papafox, i thoroughly enjoy your posts!

InsideEV is releasing delivery numbers end of the week. Some suggested that beginning of the year Tesla deliveries are often low. Would InsideEV's numbers have an effect?

Obviously not Papafox, but YES

 

[Papafox]

Thanks for your input Papafox, i thoroughly enjoy your posts!

InsideEV is releasing delivery numbers end of the week. Some suggested that beginning of the year Tesla deliveries are often low. Would InsideEV's numbers have an effect?

Historically, TSLA S and X delivers in the U.S. are heavy during the final month of each quarter because the first and second months of a quarter are the times when production for overseas customers takes priority (so as to deliver before end of quarter). Most analysts who cover Tesla understand this. If the numbers are unusually low in Jan and Feb, then either the percentage of production is being skewed even farther than normal towards overseas deliveries or some of the production is being used to fill up the inventory after inventory was pulled down in Q1. So far there's no evidence that S and X production numbers are down and looking at first delivery dates for S and X for U.S. being months away, there's no evidence that demand for these vehicles is an issue, either.

That all said, InsideEV numbers have been known to affect the TSLA stock price but the considerations are numerous, as stated above.

 

[Papafox]

So... the plot thickens today. Shorts, who have been nearly absent from consideration lately, returned this morning with their manipulative selling and pushed TSLA down at a higher percentage than either of the broader markets lost on a big down day for both. Notice the steep dips followed by near-immediate recoveries. These are classic signatures of manipulative short selling. Despite their efforts, shorts failed to cause a profound change in price today because substantial numbers of buyers kept appearing at the lower prices.

Today, shorts upped their game and traded about 48% of TSLA, nearly half of all transactions.

Where does TSLA go from here? In the longer run, it goes up as Tesla finally achieves substantial ramp-up of Model 3 production sometime this year. For this reason, simply holding your shares is a viable option. In the meantime, here are a few short-term possibilities:
* When the large buyer feels that TSLA has fallen enough, that buyer could resume the accumulation process, which would push the SP up later this week
* Macros could have a weak week, which could lead TSLA somewhat lower
* Most investors are probably overestimating the Model 3 sales number for February, and low InsideEV numbers in early March could cause shorts to redouble their efforts and push hard to take advantage of any short-term weakness

Again, the ramping up of Model 3 production remains the key to mid-term performance of TSLA.

Conditions:
* Dow down 299 (1.16%)
* NASDAQ down 91 (1.23%)
* TSLA 350.99, down 6.43 (1.80%)
* TSLA volume 4.8M shares
* Oil 62.61, down 0.40 (0.63%)

 

[Papafox]

You only have to look at the percentage of short trading today (55%) and the macro numbers (way down) to get a feel for what transpired today. Shorts are back in force and likely looking forward to the Model 3 February InsideEV delivery numbers soon, expecting the rather weak showing (for those investors who haven't paid attention) to further depress TSLA. Consequently, shorts have been manipulating for maximum advantage. For example, take a look at the NASDAQ chart below and notice how little the index dropped after 11am before beginning its early afternoon climb. Then look at TSLA and see the dip on steroids that TSLA endured. Both TSLA and the NASDAQ recovered in early afternoon, only to see a deep NASDAQ dip from positive numbers after 2:30pm or so. Today's NASDAQ dips was a nice setup for the shorts to manipulate TSLA downward, but given the setup, TSLA hung in there fairly well. In fact, look at the after-market trading and TSLA's recovery trend during that time period. Bottom line: there are still plenty of longs ready to pick up TSLA at discounted prices.

Today, Option Sniper said that TSLA's coming breakout (upward) does not depend upon Model 3 production ramping. I suppose he reads the technicals and deduces that there is accumulation taking place which will resume soon enough. I hope he is right, but I continue to believe we will stay south of any ATH until confirmation of M3 significant ramping comes forth. My pet theory right now is that TSLA has a plan that will try for 2500 M3s/week close to the end of March, but such a sudden ramping up is often impossible to pull off without snags. We'll see.

Today's NASDAQ chart

Shorts traded 55% of today's TSLA stock on a day with deep drops in the macros.

What do I expect for the next few trading sessions? The release of InsideEV February delivery numbers will likely cause an additional dip, as it appears S&X have been shipped aggressively overseas in February and Model 3 likely averaged only a third the 2500/wk number that TSLA suggests for the end of March. After that portion of the dip is completed, I wouldn't be surprised to see a fairly strong recovery. Investors lack the dread needed for shorts to achieve their full effect. The dip to the mid 290s after the Q4 ER could not have happened without the substantial macro dip of the time (and the macro dread it created), and events are not lining up like that this time around. Besides, the large buyer who has been accumulating TSLA may just be taking a breather and may well resume buying after the shorts have been kind enough to offer his firm a large discount on additional shares.

Conditions:
* Dow down 381 (1.50%)
* NASDAQ down 57 (0.78%)
* TSLA 343.06, down 7.93 (2.26%)
* TSLA volume 6.1M shares
* Oil 61.72, up 0.08 (0.13%)

 

[Mike Smith]

I think the Insideevs report tomorrow will be very interesting. I think deliveries for all models (especially 3) will be fairly bad, but that they'll also reveal that all production lines were (or are) shut down to do a refresh of S and X, and a retooling of the Model 3 line to allow an increase from 1000 to 2500 per week production rate.

I think it's pretty much accepted now that VINs are created during production, and there were barely any issued in the last 9 days. So production stayed around 1000/wk for about two months, and now suddenly production seems to stop. I think the plan all along was to upgrade the line around the end of February, and then it would take around another month from there to get up to 2500/wk. They could also have a second semi-autonomous battery pack line coming online now.

Doing an S/X refresh at the same time also makes sense - it would be way easier and efficient to do all the lines at once with production shut down completely. Refreshing S/X also allows them to raise prices, which they've been hinting at, and will ensure Tesla remains on top with the new competition coming this year.

If this is true I'd expect a very positive response from investors.

 

[JeffreyY]

Well, I just did a factory tour last week and the S/X production line was in full swing. Also, the interior looked the same. Could not see any refresh type changes.

 

[avoigt]

Monthly Chart shows a very long leg for February. Despite all the short term negativity its a bullish signal and confirms resilience. That happened the last time in January 2016 and was in retrospect a great buying opportunity.

The longer the sidestep continues the stronger the reaction will be once we get a break-out above $389.

When that will happen is reading tea leaves but that it will happen is obvious.

With the 200MA moving closer to the upper band the likelihood for a b/o does increase.

 

[vgrinshpun]

Well, I just did a factory tour last week and the S/X production line was in full swing. Also, the interior looked the same. Could not see any refresh type changes.

Do you know if MS/MX final assembly line currently operates on a two shift or three shift schedule?

 

[Papafox]

Today's TSLA descent was primarily the result of three issues:
* A broader market decline that brought the DOW down more than 400 points
* InsideEV Model 3 numbers that were somewhat lower than what aware investors were expecting and quite a bit lower than what casual investors were expecting
* A massive effort for short sellers which brought their percentage of trading up to 64% today (see chart below)

TSLA is going to rise to a new ATH after significant Model 3 ramp-up is confirmed this year, but today some bad luck of plunging macros coincided with a weak InsideEV report for Model 3, and TSLA lost more than $12. We can look at the recent approach to a whisker away from $360 as yet another sub-peak before we see that climb that takes us to ATH and beyond. Again, I continue to believe that some confirmation of M3 ramp-up will likely be needed before we see that new ATH.

So, where does TSLA go from here? If macros will simmer down, TSLA has little reason to sit in the 330s and should rise somewhat. The area around 341 to 345 has been a recent comfort zone for the stock. When word of 2500 M3s/week production rate comes (or something close to that number), TSLA is poised for a nice rise. That news could well come in just one month as Q1 ends. With Tesla filing the 8K to advise investors that the company has the ability to achieve that level of battery module production before March is out even without the new German module line up and running at GF1, Musk has a lot on the line to show substantial output for a week in March. I think he'll come close. Add 2000-2500 additional modules/week once the German module line is running this spring, and the battery module bottleneck looks like it will be over at last. Cha-ching.

The mistake many casual observers of Tesla are likely making tonight is to look at the InsideEV growth of M3 deliveries from about 1900 in January to about 2500 in February and to conclude that the ramp-up will be somewhat linear. I seriously doubt such a conclusion. Instead, I suggest that Tesla will do whatever is necessary to produce close to 2500 Model 3 battery modules in one week in late March and thereby regain credibility. My pet theory is that TSLA is aware of costs and not in a big hurry to substantially expand a less-efficient battery module solution any earlier than necessary. Once a 2000+ modules/week rate is reported in early April, though, Tesla cannot scale production back down, and production of Model 3s will be humming along at a respectable rate, then nearly doubling when the German module line is added and Fremont has time to spin up as well. The current rate of about 1000 Model 3s/week is sufficient for burst-testing the various stages of Model 3 production, and Tesla should have a good handle on their weak spots in Fremont.

How do we know when the current dip has bottomed out? The recent dip below 300 was quickly rejected by the market and so there's no reason to go anywhere near that low unless the macros go nutso on us. I will be looking for a turn-around in the macros and attempts by the shorts to manipulate TSLA that are defeated by buyers. Once I see the shorts struggling to pull off their dirty-work, I start bringing some of my dry powder back into play. Consider this dip to be yet another buying opportunity, but one close to the real action of this year, which is when M3 production runs up substantially and the stock price responds with great enthusiasm. Until then, watch the macros, Model 3 production numbers and difficulties encountered by the shorts. Judging by the rapidly-rising short percentage of trading, the dip could have more days to run before it turns.

Compare the 64% of trading by shorts today with the sub-30% trading just 4 sessions ago.

Conditions:
* Dow down 420 (1.68%)
* NASDAQ down 92 (1.27%)
* TSLA 330.93, down 12.13 (3.54%)
* TSLA volume 6.9M shares
* Oil 60.95, down 0.04 (0.07%)

 

[Papafox]

Just bought some shares at 331.40. Macros can pull TSLA up or down, but the shorts are losing their edge and I see such a development as a positive turn of events.

 

[Papafox]

Correction, the shorts have LOST their edge. Even with 67% of TSLA trading today, shorts couldn't keep TSLA from running up. This development has big implications for trading. More info with main report.

 

[Papafox]

Here's a question for you... On a day with mixed macros and shorts doing more than 2/3rds of the TSLA trading, does the stock price rising $4 on no substantial news suggest that the shorts have lost their ability to sink this stock further? I would say yes but include the caveats that renewed macro worries or substantial, negative Tesla news (if they hatch) could change the equation. Thus, I purchased shares Friday afternoon when it became apparent that TSLA was going to break upwards into the close instead of downwards.

The daily chart suggests that shorts became involved with selling during the pre-market hours and then when TSLA tried to rally right after opening the shorts sold hard and plunged TSLA below 325 by 10 am. Unfortunately for them, many longs recognized that bottom, chose to take advantage of the great price, and bid TSLA up despite the efforts of the shorts. From noon until about 3 pm, shorts engaged in a game of whack-the-mole, but when TSLA started climbing around 3 pm it kept going and never looked back. Buyers generally like to pick up TSLA in the final hour of a Friday rally because so often that run upwards carries over to the opening on Monday morning.

Unless news or macros intervene, I'm thinking that Friday defined the low for this current holding pattern that TSLA investors are in while we await news about the Model 3 ramp. I think the high end of the holding pattern is 360 which, for various reasons, likely requires some confirmation of Model 3 substantial ramp before TSLA enters All TIme High territory again. I continue to believe that 341-345 is a sweet spot for the stock at the moment. We'll see. If shorts manufacture a mandatory morning dip on Monday and macros look reasonable, I'll be doing additional buying.

For the week, TSLA closed at 335.12, down 16.93 from last Friday's 352.05. Enjoy your weekend.

Conditions:
* Dow down 70 (0.29%)
* NASDAQ up 77 (1.08%)
* TSLA 335.12, up 4.19 (1.27%)
* TSLA volume 5.1M shares
* Oil 61.25, up 0.26 (0.43%)

 

[Papafox]

Short and sweet:
* Low volume and 64% of trading done by shorts = lots of manipulation
* Broader markets recovered throughout the day but mid-day TSLA was held back by short selling (often, if shorts can convince traders that TSLA will not rise with the broader markets, such big up days are not good for TSLA. The shorts succeeded with their mischief today, but had to deploy lots of resources to do so).
* No major Tesla news

Today TSLA began with a mandatory morning dip, right on schedule and a buying opportunity as expected. As the broader markets rose on reduced concerns of a trade war, so did TSLA. Up until about 11:30am, TSLA's movement was influenced by the broader markets, but once TSLA broke into the green, the shorts began a prolonged game of whack the mole to keep TSLA from climbing with the NASDAQ. At about 1:30pm, shorts pushed TSLA down into the red and held her there. About 15 minutes prior to close, buyers started bidding TSLA back up towards the green, but because of the low volume shorts were able to throw enough resources forward to thwart the mini-rally..

The mandatory morning dip required resources from the shorts, as did the capping throughout the day. For this reason, today's trading was not profitable for the manipulators and they are slowly taking their licks. A disparity exists between bears and bulls at the moment. Shorts believe that TSLA Model 3 production is severely gorked and when production finally ramps, if it does, the car will be unprofitable. This is a very unwise position to take. Bulls, on the other hand, see that Musk stuck his neck out with the 8K statement that Tesla can reach 2500 M3/week in Q1 without the German battery module line, which is going to be installed this month. I see Tesla as having a lot on the line in getting Model 3 close to 2500/week by the end of this month and that the stock will fly upward if that rate can be achieved and it will lose value if the significant ramp up doesn't come. The good thing for bulls, though, is we get second chances if there's a miss. The stock would head south if there's a significant miss, but when Tesla achieves 5,000 Model 3s/week it will soar. I would just caution you about not trying to time these events because Tesla is almost always late (but eventually achieves its aim).

Tesla should have continued to run up with the broader markets today but manipulation held it back. Here is the NASDAQ daily chart

Although short percentage of TSLA trading dipped a few points from Friday, it is still about 2/3rds of all shares traded, which is crazy high and explains the lack of price appreciation today. The exceptionally low volume suggests that longs are hanging tough, waiting to see Model 3 ramp up and for good things to happen.

Looking at the technical chart, you can see why the shorts are throwing so many resources at TSLA at the moment. TSLA is just below the 50 DMA and not far below the 200 DMA. The shorts don't want to see TSLA rising above these two number when a golden cross of the 50 DMA rising above the 200 DMA takes place. If you want to understand why the shorts pushed TSLA down to about 333 today and held it there, the 50 DMA and 200 DMA tell you why.

Conditions:
* Dow up 337 (1.37%)
* NASDAQ up 73 (1.0%)
* TSLA 333.35, down 1.77 (0.53%)
* TSLA volume 3.8M shares
* Oil 62.62 up 0.05 (0.08%)

 

[Papafox]

Traveling today so keeping it brief. The turbulence in after-market trading likely is related to Trump economic Gary Cohen's apparent resignation. Tomorrow is likely to be rocky. Further, the resignations signals that Trump is more likely to pursue tariffs, which is troublesome to the market, and moving away from free market policies may be troublesome for Tesla in particular if the trade wars escalate. Let's figure out a new range for this stock after it settles.

Conditions:
* Dow down 9 (0.04%)
* NASDAQ down 41(0.56%)
* TSLA 328.20, down 5.15 (1.54%)
* TSLA volume 4.3M shares
* Oil 62.12, down 0.48 (0.77%)

 

[EinSV]

@Papafox since you are traveling I thought it was worth adding that according to shortvolume.com short percentage of trading yesterday was up to 68.3% — so consistently very high numbers over the past four days.