Papafox's Daily TSLA Trading Charts

[AlMc]

I've been buying J20 leaps today. Knowing that Tesla has reached a production rate of at least 2,000 M3s/week tells me that the Q1 delivery and M3 production numbers will not be bad. These prices are just too attractive for a company that expects to quadruple their production and deliveries, year over year.

I did as well. Put in a decent order size for J20 250s and only got 2......They are actually 'green'. Feels like Christmas in my portfolio as they go well with the red J20 $200s I bought when the SP was about $300...ugh

Thought I was super smart to grab those at $300 SP.......

OK with me if this is the bottom.........

 

[adiggs]

Let me add to ggr's response.

If you have a margin account as I do, the benefits of such an account are immense.I really don't want to be without the flexibility of a margin account and so I inadvertently make my shares available for shorting even though I am not interested in doing so. I trade into and out of shares frequently enough, however, that Fidelity has never apparently used my shares for shorting because I have never received any payment.

On the other hand, Curt Renz advises longs with shares to take steps such as a high value sell order to keep the brokerage from using your shares in shorting. I personally appreciate this viewpoint and feel that the carnage that the shorts create is not worth the income from lending shares. If you feel that you want to do the right thing and not lend out your shares, I am 100% behind you.

My understanding with margin accounts, is that you won't receive any payments should your shares be lent out. For this reason, your shares will be the first shares lent out by your broker, as your borker will receive all of the interest paid by the shorts to borrow your shares.

I've read of others with enough equity in their accounts, that were able to designate their Tesla shares as fully owned / paid for - you'll need to check with your broker.


So shares like mine, that are currently lent out, are the last ones the brokers want to lend out. Why do I lend mine out? I'm getting about .75% interest right now - it's sort of like receiving a small dividend payment from shares that don't pay a dividend. It's not enough to live on, but its also better than a stick in the eye.

I'm comfortable with the safeguards in place that ensure I get my shares back should the borrower have difficulty with repayment (the primary safeguard being that I didn't lend my shares to the borrower - I lent them to my broker and if they don't return them, then its the broker in default, not the end borrower; brokers are allergic to defaulting, for obvious reasons, at any scale).

 

[Papafox]

Today was a big down day for the broader markets and the NASDAQ in particular, with TSLA's dip not far from that of NVIDIA and Amazon.FUD was flying at the furious rate we've become used to recently. News of the Model X autopilot accident was hurting Tesla today. Good news surfaced as an email from Musk to Tesla employees revealed that Tesla has finally reached a production rate of 2,000 M3s/week while the production team tries for another day's production at high levels so as to exceed that number by as much as possible. In other words, today was dominated by bad news that was of a temporary nature in affecting the SP but powerful good news that is of lasting value to Tesla was announced. I like to buy on such days.

Likely because of the leaked email, shorts were unable to hold TSLA long below 252 in the afternoon even after trading their usual 68% of the shares. Many longs are waiting for the delivery and production numbers, likely to become available tomorrow, before they venture into buying, giving many of us a final opportunity to pick up additional shares and options before the numbers are announced.

I chose to jump into the buying today as I realize the SP could climb quickly if the numbers are good. If they are so-so and shorts continue their brutal assault on TSLA I am ready to ride out the storm and then watch the SP rise at a later day. As long as you have a stomach for difficult times, conclude that Tesla has solved an important bottleneck and will continue to grow the M3 production numbers in the coming month, I believe that buying now is a reasonable investment.

Conditions:
* Dow down 459 (1.90%)
* NASDAQ down 193 (2.74%)
* TSLA 252.48, down 13.65 (5.13%)
* TSLA volume 16.1M shares
* Oil 63.07, down 0.06 (0.10%)

 

[MacRocket]

My understanding with margin accounts, is that you won't receive any payments should your shares be lent out. For this reason, your shares will be the first shares lent out by your broker, as your borker will receive all of the interest paid by the shorts to borrow your shares.

I've read of others with enough equity in their accounts, that were able to designate their Tesla shares as fully owned / paid for - you'll need to check with your broker.


So shares like mine, that are currently lent out, are the last ones the brokers want to lend out. Why do I lend mine out? I'm getting about .75% interest right now - it's sort of like receiving a small dividend payment from shares that don't pay a dividend. It's not enough to live on, but its also better than a stick in the eye.

I'm comfortable with the safeguards in place that ensure I get my shares back should the borrower have difficulty with repayment (the primary safeguard being that I didn't lend my shares to the borrower - I lent them to my broker and if they don't return them, then its the broker in default, not the end borrower; brokers are allergic to defaulting, for obvious reasons, at any scale).

Is that 0.75% per month or per year?

 

[Johann Koeber]

It is an annual rate, accrued daily.

 

[avoigt]

Looking at the weekly chard we may have found a support near a former resistance at $ 241 now and from the 100 MA at $253. That support was tested 12 months ago. At that time it broke was tested again and off we went.

Between $290 and $241 there was technically not really anything that helped to support the SP. Therefore we went through like nothing with negative news and shorts had a party.

Yesterday looked to me like mainly driven from Marco data. Low volume may be a good sign now because only a few people sold but not many bought which may explain the strong down day in a very negative environment. Negative news from the weekend did not to help too.

Markets don't like uncertainty and buyers waiting at the sideline and are holding back until numbers are out. I hoped that to be yesterday but did not happen. Once the uncertainty is gone regardless if good or bad I expect buyers to come back.

Fundamentally nothing changed other than the SP gets more attractive every day. People with decades of experience should get greedy now unexperienced may get nervous and sell.

People always asking me how I make money at the stock market. Its all about making sure your feelings don't get into your decisions at moments like this. Once you learned it, its more easy to overcome the next time and do the right step. If for whatever reason $241 does not hold its not a lot that supports us down there. Markets are unreasonable already but there is always the option that the market gets more dump.

I bought at these low levels and may do again. No advice as I have been wrong before....

 

[Papafox]

Even with Model 3 production rate barely above 2,000/wk in the final week of March, the official announcement by Tesla was enough to send the SP above $273 before the inevitable chiseling away at that number by short-sellers in the light volume hours of the afternoon. Somewhat surprisingly, 64.4% of trading today was done by shorts, which indicates that they have not thrown in the towel when faced with the numbers. The trading of over 300,000 shares in the closing minute suggests that shorts are reloading for more games ahead. Their hope is that these Model 3 delivery numbers are an illusion and that sustainable numbers will be far lower. They actually have some reason for holding some hope in this area because the 1000 M3/week number previously announced by Tesla was not followed with reliable production at such a rate. Instead, longs and shorts await the slow evidence as it builds of Tesla's Model 3 production ramp. Nonetheless, congratulations to those of you who picked up shares yesterday and enjoyed a 15 point rise today.

Where do we go from here?
The negative scenario is that shorts continue to trade 64-68% of TSLA in the foreseeable future and they take every opportunity to exploit macro weakness and any bad news that comes along, waiting for evidence to appear that Model 3 is not ramping. If Model 3 shows no significant upward movement in production as we approach the end of Q2, then the shorts would be in the driver's seat again.

The positive scenario is that some big institutional buyers will see the combination of substantial Model 3 production growth and extremely attractive stock price as a reason to take a bigger stake in Tesla. At that point, the acquiring entity is in the driver's seat. If Tesla can indeed approach 5,000 M3/mo. by the end of Q2, then Q3 should indeed include high margins, high production, profits, and nicely positive cash flow. If you believe that Tesla can substantially ramp M3 as they claim, why wouldn't you invest in such a 3Q which is less than 90 days away? Companies such as Fidelity that have been backing out of TSLA may reverse that trend and start growing their portfolios again. Analyst upgrades (which may come as early of Wednesday) would support such a development. Even without big institutions jumping in right away, though, if Tesla's Model 3 numbers continue to climb, at some point the writing will be on the wall and as more longs jump in to buy, more shorts will begin to cover. With more than 31 million shares now hold by shorts, their exit will substantially increase the stock price. Please stick around to enjoy that moment.

My best guess? We're not going to likely see the steep V shape on the recovery side of this dip quite yet. Shorts are being nasty and holding on as long as possible. Instead we'll likely see moderate changes in SP for a while until the increase in Model 3 production is clear and then all of a sudden you will see a stock price run-up that will be impressive and perhaps hard to time. Please also stick around for that moment.

If your time horizon stretches toward the end of 2018 or longer, then the current SP still represents a very nice entry point.

Shorts traded 64.4% of TSLA shares today

Conditions:
* Dow up 389 (1.65%)
* NASDAQ up 71 (1.04%)
* TSLA 267.53, up 15.05 (5.96%)
* TSLA volume 18.8M shares
* Oil 63.39, down 0.12 (0.16%)

 

[ggr]

IMHO: A lot of shorts are individual investors, and don't necessarily watch the stock price like the hawks we are. So I think that there will be some who worry overnight, and cover in the morning. It wouldn't be enough to create any kind of actual squeeze, but I expect another positive day tomorrow. No, I'm not going to say "not an advice", except to say that that's a stupid saying.

 

[adiggs]

I've been meaning to ask @Papafox - you're using % of trades that are short as an important element in your daily analysis. Do you know how that number is arrived at?

I ask because my first thought is that every trade has a buyer and a seller. Nobody buys without somebody else selling, and nobody sells without somebody buying. The one thought I have is if trades are reported with the additional detail of whether either end of the trade is doing the opposite - sell-to-open, or buy-to-close. Traders doing either are what I would consider short sellers.

Thus my interpretation is that 64-68% trades by short sellers really means that 64-68% of trades involve somebody doing sell-to-open or buy-to-close on either end of the trade (or of course, both ends of the trade).

Presumably that's share weighted, so 64-68% is really the % of shares involved in trades in which either or both ends of the trade are sell-to-open or buy-to-close. This might also help understand how such a high fraction of daily volume comes from people in a short position, yet the total number of shares short rises modestly, but not a million+ a day.


The problem here is that if trades aren't reported with the additional detail of each end of the transaction, then I'm really wondering about how trustworthy that piece of data is.

And if trades DO include that additional piece of information, then it seems like somebody with the desire could in fact reconstruct the total number of shares short on a daily basis and update it daily. Heck - real time as each trade with whether each side is opening or closing the position gets posted. But this level of detail about short interest isn't available (that I know of).

Thanks!

 

[Papafox]

I've been meaning to ask @Papafox - you're using % of trades that are short as an important element in your daily analysis. Do you know how that number is arrived at?

I ask because my first thought is that every trade has a buyer and a seller. Nobody buys without somebody else selling, and nobody sells without somebody buying. The one thought I have is if trades are reported with the additional detail of whether either end of the trade is doing the opposite - sell-to-open, or buy-to-close. Traders doing either are what I would consider short sellers.

Thus my interpretation is that 64-68% trades by short sellers really means that 64-68% of trades involve somebody doing sell-to-open or buy-to-close on either end of the trade (or of course, both ends of the trade).

Presumably that's share weighted, so 64-68% is really the % of shares involved in trades in which either or both ends of the trade are sell-to-open or buy-to-close. This might also help understand how such a high fraction of daily volume comes from people in a short position, yet the total number of shares short rises modestly, but not a million+ a day.


The problem here is that if trades aren't reported with the additional detail of each end of the transaction, then I'm really wondering about how trustworthy that piece of data is.

And if trades DO include that additional piece of information, then it seems like somebody with the desire could in fact reconstruct the total number of shares short on a daily basis and update it daily. Heck - real time as each trade with whether each side is opening or closing the position gets posted. But this level of detail about short interest isn't available (that I know of).

Thanks!

Let me research. I have been very interested in this same question.

 

[elasalle]

Let me research. I have been very interested in this same question.

Why Short Volume is Important | Volumebot here's a link I posted earlier in General Discussion. ~ Cheers!!

 

[Papafox]

Congratulations longs on another big day. I expected the shorts to play the low-volume afternoon trading game more aggressively than yesterday and try to erase some of the gain today, but they clearly were not in control of the SP and it ran away from them. Looking at the opening, you can see a mandatory morning dip, followed by about 4 whack-the-mole bops before TSLA entered its climb into the green. After 1pm I see two dips that looked like efforts to erode the high-volume morning gains, but they both failed and TSLA climbed for the remainder of the day. Once shorts lost control, I am sure some panic struck retail shorts who then chose to cover and scuttle the plans of the hardcore shorts. I think ggr nailed it.

Thanks adiggs and elasalle for comments regarding short interest. I have always known that a portion of short volume has been various tasks performed by marketmakers, but there's a world of difference in how this stock behaves when short interest is at 40% and when it is at 65% (today's short percentage of trading). As I peel back the leaves of the onion and learn more I will share with you.

A few days ago, we longs were feeling the pain of wondering just how low can this stock go as we await the Q1 delivery numbers. That's the feeling of many retail shorts tonight as they wonder how HIGH this stock can go with a confirmation of 2,000 M3/week production last week. For this reason, the aggressive shorts may be unable to control the stock tomorrow, either, and so the possibility exists for another day of TSLA climbing. A slight climb in after-hours trading today suggests demand is still there for pushing TSLA higher if it gets started again tomorrow. Also of note is the rather continuous increase in SP of TSLA throughout the day. This means that the manipulating shorts who originated the Whack-a-mole sessions in the morning couldn't cover today or covered at substantial losses. Couldn't happen to a nicer crowd.

Looking at the technical chart, you can see that so far the recovery portion of the "V" is at least as steep as the downward side. Option-Sniper, who predicted both the dip and the recovery with numbers is now calling TSLA the most promising stock available for long-term investing. That's music to my ears.

We have tests ahead, such as whether Tesla can indeed continue producing Model 3s at a 2,000/week rate, whether it can start the rate increasing at some point toward 2,500/wk, and when the Grohmann battery module is up and running, how quickly Tesla can progress towards 5,000 M3/week. Keep an eye on these issues because they'll determine the shorter-term performance of TSLA as Model 3 ramps up.

Conditions:
* Dow up 231 (0.96%)
* NASDAQ up 101 (1.45%)
* TSLA 286.94, up 19.41 (7.26%)
* TSLA volume 19.6M shares
* Oil 63.55, up 0.18 (0.28%)

 

[justvisiting]

So you´re saying that short percentage was 65% but shares are still up 7%??? How is that even possible? And the shares were down heavily in pre-market and shot up once trading started, where was the "mandatory short manipulation morning dip"? Are longs now "manipulating"? Or maybe, just maybe, you were just guessing or making things up all the time?
Im confused.

 

[ggr]

So you´re saying that short percentage was 65% but shares are still up 7%??? How is that even possible? And the shares were down heavily in pre-market and shot up once trading started, where was the "mandatory short manipulation morning dip"? Are longs now "manipulating"? Or maybe, just maybe, you were just guessing or making things up all the time?
Im confused.

Covering short positions is also trading by the shorts. At the same time, postings in other threads show that the cost to borrow shares to short is going up. Trading by the shorts is intended to manipulate the price down, but that doesn't mean it has to be successful. If you want to think of it as longs manipulating the price up, I guess that's equally valid, except that more than 50% of the volume is associated with shorts.

 

[Papafox]

Yep, TSLA had another big day left in her. Congratulations longs. The dip on steroids from the previous $29x bottoms to below $250 has now been retracted, by orders of the market.

Working in favor of longs today was this news that Tesla just registered another 4700+ VIN numbers for Model 3. By itself, it does not confirm any production numbers, but since Tesla has been keeping the VIN registrations fairly well aligned with production, it does give an indication that a higher ramp of Model 3 may be anticipated (or it may simply mean that TSLA is moving toward 2 weeks of VINs needed per request rather than just one).

Here's a big tip of the hat to TMC Investor forums member @bdy0627 for researching how deeply TSLA tends to plunge during a deep dip and how quickly it recovers. Check out his post. Let me quote: "Do not expect to reach prior peak of $360 but very likely $309 (86% of $360) or even $320 (89% of $360) before the stock dips again. Expect it to take up to 24 trading days to climb there but likely less."

Bdy0627's research is a very useful rule of thumb when considering whether you're willing to buy more during a deep dip. One caveat here... remember back when we were at 325 and I spoke the infamous words, "the shorts have pretty much taken this attack about as far as it can go", and then we promptly plunged? My mistake was that I used assumptions from dips that followed an event, rather than dips that are the result of a currently-developing situation (such as Model 3 production numbers). For this reason, I would extend a word of caution to this excellent work by @bdy0627 and remind everyone that the Model 3 production ramp is still an active process and any assumptions made can be overruled the next day by new information (good or bad) about the ramp.

During after-hours trading, TSLA lost nearly half its gains for the day as NASDAQ futures dipped by over 1% (deeper dip earlier) upon word of Trump threatening to deepen the trade war with China. So, it looks like tomorrow will be our chance to see how TSLA performs on a bad macro day.

Conditions:
* Dow up 241 (0.99%)
* NASDAQ up 34 (0.49%)
* TSLA 305.72, up 18.78 (6.54%)
* TSLA volume 19.1M shares
* Oil 63.11,down 0.43 (0.68%)

 

[neroden]

The one thought I have is if trades are reported with the additional detail of whether either end of the trade is doing the opposite - sell-to-open, or buy-to-close.

Yes, they are. I don't know where the data is collated, but I do know that trades must be recorded specifically as such when they are entered into a broker's system or sent to an exchange. The market makers and their computers know whether they're getting a buy-to-open order vs. a buy-to-close order.

 

[justvisiting]

Covering short positions is also trading by the shorts. At the same time, postings in other threads show that the cost to borrow shares to short is going up. Trading by the shorts is intended to manipulate the price down, but that doesn't mean it has to be successful. If you want to think of it as longs manipulating the price up, I guess that's equally valid, except that more than 50% of the volume is associated with shorts.

You are absolutely right. Only caveat would be the "intention to manipulate". You can just open a short position and wait for the price to come down, no need, and for most people no possibility, to manipulate anything.
Just wanted to point out that explaining down days with short volume and up days with the "strength of the company" when short volume is the same on all days is a highly suspect analysis.

 

[Papafox]

Today was a red macro day with both the Dow and the NASDAQ down greater than 2.25%. TSLA descended less than either and noticeably less than the other tech stocks I track, and so we should consider today a day of relative strength for TSLA. At various points throughout the day, TSLA managed to defy the odds and crack into the green, despite the poor macro environment. Taking a look at the deep dips you see today, followed by immediate near recoveries, I would say the shorts were trying their best at accelerating TSLA's decline today but the stock kept bouncing back. Looks like any time TSLA descended below 297 or so today the stock rebounded as buyers took advantage of the dip.

For the first time in over a month, we're seeing TSLA short percentage of trading drop from the mid-60s. While an optimist might conclude that shorts are having a change of heart, a more likely explanation is that shorts are finding shares to short more difficult to find. I've heard in the middle of this week that fees for borrowing shares have been rising, indicating shortening supply. This is a potentially positive development if percentage of trading by shorts starts to fall because the manipulations do in fact influence the stock price.

Here's a technical chart to gain a little perspective about the recent megadip. TSLA is trading near the mid-bb now, giving lots of potential upside and downside. Let's please explore the upside.

Today TSLA added nearly 3000 Model 3 VINS, which suggests the fast pace of VINs registered this week is more likely a change of patterns than a massive increase in output. Perhaps Tesla wants to make VIN counting a more difficult and less precise practice as the company ramps up in Q2.

For the week, TSLA closed at 299.30, up 33.17 from last Thursday's 266.13. It's been a wild rodeo, my friends. Enjoy your weekend.

Conditions:
* Dow down 572 (2.34%)
* NASDAQ down 164 (2.28%)
* TSLA 299.30, down 6.42 (2.10%)
* TSLA volume 13.2M shares
* Oil 62.06, down 1.48 (2.33%)

 

[Intl Professor]

I'm sure you know we all appreciate your good work. These days I especially like your calm, relaxed writing. You must be a hellacious good pilot and trainer of pilots. As a steady long since 2010 I normally am calm but the macro these days is really getting on my nerves.

Thanks for your steady style.

 

[Papafox]

Over the past week, evidence suggests that Tesla has indeed continued to keep up with the previous week's pace of Model 3 production, thereby taking the wind of the sails of shorts who suggest that the end of March push in M3 production was unsustainable. Some VIN counters suggest an even higher output this past week, which is all the more encouraging if true. Photos of Model 3s moving out of the Fremont factory lot, M3 VINs acquired this week by Tesla, invitations to configure, and VIN numbers assigned to reservation holders all point to excellent production for a second week in a row.

I remain optimistic that TSLA can climb higher this coming week if macros settle down. Short percentage of trading is down noticeably on Thursday and Friday, and so ironically the high demand for Tesla shares to short might actually somewhat crimp the mischief of the short manipulators in the near future. What would be nice would be to move quickly from too few shares available to short to a situation where shorts are covering, TSLA is rising, and manipulating is clearly unprofitable for shorts. Fingers crossed.