Papafox's Daily TSLA Trading Charts

[adiggs]

I may be off here, edit: I think I was, but keeping this for posterity. but I think your point regarding share reallocation is valid regarding counting, but not share availability.
Example: company has 100 shares total, brokerage owns 40, CEO has 30, and everyone else has 30. Now if brokerage lets someone short sell 10, the numbers of in-hand shares are 30 for brokerage, 30 for CEO, and 40 for everyone else. The loaned shares are no longer in play by the brokerage and a short cannot buy them to close their position.

Extreme case: float of 100 shares, everyone uses the same brokerage. Through a series of 40% margin transactions backed by cash or other stock, there are 200 shares shorted (due to the brokerage loaning them multiple times due to everyone having their accounts there). There are 300 entries, but only 100 shares are in people's accounts, along with 200 owed shares. When the shorts try to cover, there are only 100 shares available for them to purchase from.
Edit: it could be that there are 300 'shares' in people's accounts, but only 100 real shares at the brokerage. Like a bank, as long as you can pull 'your' money out, you don't care how full the vault is. So there are 300 possibilities for repurchase.

So how does the accounting work? The outstanding number can't change. And the float number is the outstanding minus CEO/restricted shares, so it is fixed also. If the brokerage reports the total number of shares it is responsible for (loaned and in-hand) then the sum of everyone will be more than the float. If they only report in hand shares, then the total will be the float.

The key for thinking about this is to look at it as micro transactions, rather than aggregate. Then work backwards to the aggregate.

I buy 1000 shares of Tesla and make them available through my broker to be borrowed. I own 1000 shares.

My broker lends them out to somebody that wants to be short Tesla by 1000 shares. This transaction results in me still owning 1000 shares AND the person buying the 1000 shares becoming the benefical owner of 1000 shares, with the short party having sold 1000 shares. The net position is +1000 for me, +1000 for the other buyer, and -1000 for the short party, for a net of 1000 shares.

But there are 2 of us that have 1000 share positions, with the person buying to open from the short having voting rights on the shares. I still have a 1000 share position and have given up my voting rights in exchange for interest.


For that second buyer, they own 1000 shares and can make them available through their broker to be borrowed. If they do, and they are then borrowed, a third buyer can buy the 1000 shares (with the help of somebody selling to open the 1000 shares), and now we have 3 beneficial owners of 1000 shares plus 2 short sellers. The net shares remains at 1000, but now we have 3 owners who possess 1000 shares (with 1 of the 3 of us having the voting rights).

This is why Tesla can have 170M shares outstanding, with 40M shares short - this means there are 210M shares beneficially owned, for a net of 170M. If the ownership gets too far out of whack with total shares outstanding, it's the shorts that are guaranteeing all of those extra shares with their own cash and other holdings.


The voting rights are key to understanding, I believe, why some owners of shares don't make their shares available. If your'e Elon, if you make your shares available to borrow, then your voting rights are diminished while those shares are lent out. In an extreme case, if you can't get your shares back in time, you could lose your position in the company (though it'd be hard to lose your ownership claim - you might find yourself on the outside looking in). So Elon doesn't make his shares available, nor does anybody else with a significant holding and a desire to be involved in corporate decision making.

I figure the shares held by brokerages such as Fidelity, are moving in and out of being lent and returned, constantly. If you're Fidelity, the best shares to lend our are your own - you get 100% of the interest paid by the shorts. You only turn to people like me to borrow shares when you're at the limit of your own shares you can lend out, based on internal risk assessment and management guidelines.

I figure most mutual fund holdings are similar to my own - available to be borrowed when desired (because the fund will be happy to get the interest when its available), but ok to not have them lent out too. That's based on my belief that most mutual funds are indifferent to the most direct exercise of corporate governance.

Of course, any individual share holder vote can also change the dynamic, where individuals and/or funds decide they DO want to vote their shares to be sure those shares are voted the right way.


Going back to my made up example, there are 3 owners of 1000 shares, and only 1 of us has the voting rights. If I decide I want to vote my shares, my broker has made me a direct and personal guarantee that I can get my shares back on demand. If these were the only 3000 shares, then the broker and 2 shorts are going to find a price that will lever the other 2000 shares of the hands of the other 2 owners, or go into default trying (returning cash instead of shares IS default - it's a backstop, not an acceptable substitute). The broker won't ever allow themselves to be that exposed, so they'll keep their own pool of owned shares they can use worst case to satisfy my demand to recover my shares so I can vote.

 

[Papafox]

Today was a very nice turn of events in the battle with the shorts for 284. Not surprisingly, the day began with a mandatory morning dip, but when the stock convincingly climbed away from the morning dip, it ran quickly to climb above 284, but only for a moment because the shorts were not going to let such a transgression get back during the morning hours. Check out the chart above and you can see that every time TSLA approached or climbed above 284 today, it was quickly beaten down. The exception was the climb about 3pm when the NASDAQ started losing ground.(see charts below) TSLA crossed above 284 and such a crossing late in the day encouraged either short covering or longs jumping in... good news either way. The other battle lines today was drawn at the red/green line and you can see all the dips that almost took us to the red.

After days of mid-50% TSLA trading by shorts that likely lost money for the short day-traders, the short trading percentage dropped to 49% today, which is consistent with short day-traders getting tired of the recent losses and also helps explain the better results seen today versus the previous two trading sessions. Fewer manipulations by shorts equals a better opportunity for a rally to gain some traction.

TSLA daily chart

NASDAQ daily chart

TSLA had some pretty strong tailwinds helping it out today with the macros way up. After-hours trading progressed higher by close, and so sentiment continues to be positive for TSLA. With the May 2 Q1 ER only a few trading days away, you're going to see some positioning for the ER and a climb above 284 today is an important step in suggesting that TSLA has bottomed out. Where TSLA goes in the coming weeks depends on the message delivered at the ER.

Conditions:
* Dow up 239 (0.99%)
* NASDAQ up 115 (1.64%)
* TSLA 285.48, up 4.79 (1.71%)
* TSLA volume 4.3M shares
* Oil 67.99, down 0.20 (0.29%)
* Percentage of TSLA trading by shorts: 49%

 

[cousinHub]

Hi everyone. I'm coming to this thread from the link in cleantechnica article called "The Fascinating Tesla Short Story".

I just want to share a chart I created showing the change in Short Interest (red and green bars) and the average levels at which the shorts added or subtracted to their positions.

Zoom in 2017 & 2018 below :

 

[cousinHub]

I posted a video in the comments section of the cleantechnica article but I don't know if it did go through (?), the black boxes in the charts above are what I called shorts 'attacked on the stock' (i.e. major increases in short positions)

 

[Reciprocity]

I posted a video in the comments section of the cleantechnica article but I don't know if it did go through (?), the black boxes in the charts above are what I called shorts 'attacked on the stock' (i.e. major increases in short positions)

Thats awesome, but the music is crap. I suggest something more like the Benny Hill show that implies how Shorts are basically side show circus clowns.

 

[Papafox]

Congratulations, longs, the pre-ER battle for 284 has been won, and the Chanos dip appears over.

During the morning hours it became apparent that something positive was happening with TSLA. The shorts could push TSLA slightly into the red with a spike in volume because of their selling, but as the volume slackened, the price ran up and required another selling spike. The inevitable finally happened after a few days of bull fighting, which is that the shorts ran low on ammo, tired with losing money on their manipulations, and the SP climbed away to more a more reasonable perch for awaiting the ER.

Looking at the technical chart, you can see where the fairly level consolidation after the 244 dip turned into a shallow downtrend, then a not-so-shallow downtrend before the last two days really changed the momentum.

For the week, TSLA closed at 294.08, up 3.80 from last week's 290.24. The big change from last week is the momentum, which is now much more favorable. Next week's action hinges on the 1Q ER, which hinges primarily upon the Model 3 production ramp, but that's a subject for another day. Enjoy your weekend.

Conditions:
* Dow down 11 (0.05%)
* NASDAQ up 1 (0.02%)
* TSLA 294.08, up 8.60 (3.01%)
* TSLA volume 4.3M shares
* Oil 67.97, down 0.22 (0.32%)

 

[Paracelsus]

Hi everyone. I'm coming to this thread from the link in cleantechnica article called "The Fascinating Tesla Short Story".

I just want to share a chart I created showing the change in Short Interest (red and green bars) and the average levels at which the shorts added or subtracted to their positions.

View attachment 297128

Zoom in 2017 & 2018 below :

View attachment 297129

These are very helpful visuals. Thanks for your efforts! They clearly show that it is taking an exponentially increasing amount of money to create a similar retracement percentage on the share price. I interpret this to not only be based on stock price, but also because less and less of the float is available for manipulation at each attempt. The combination of price & shrinking float suggests this is unsustainable, and also supports the concept of the short positions needing more media support for help with FUD at each level.

The current shorting effort as reflected in your graph started in August 2017 in my opinion, so I am combining the last two vertical short-position bars into the single effort that resulted in a 40,000,000 share short valued at approximately $10B to $12B. Assuming the required effort continues to be exponentially difficult, the next attempt will require an investment from shorts of $20B to $30B. Unbelievable that there exists a demographic of people in this world that are willing to invest such a tremendous amount of money to bet against the future of the planet. An effort on that scale will ultimately result in more than just Chanos and the Koch's being visible participants.

Your graphs also helps bring visibility to the series of 'mini-squeezes' (for lack of a better term) that occurred after each effort............the catalyst for which was the shorts having to let go each time they tried to choke TSLA. And if the short positions from August-to-present are combined on your graph then the next release of these short positions could be a run to the mid-500's before a retracement.

Great work, @cousinHub

 

[defc0n]

Hi everyone. I'm coming to this thread from the link in cleantechnica article called "The Fascinating Tesla Short Story".

I just want to share a chart I created showing the change in Short Interest (red and green bars) and the average levels at which the shorts added or subtracted to their positions.

View attachment 297128

Zoom in 2017 & 2018 below :

View attachment 297129

Very helpful visualization that makes a persuasive argument for an upcoming squeeze. Thanks. Unless Tesla does go bankwupt soon, which I believe incredibly unlikely, shorting TSLA now seems insane to me.

 

[ggr]

bank·wupt
ˈbaNGkˌwəpt/
adjective

1. 1.
   (of a person or organization) declared in law able to pay outstanding debts due to reckless growth.
   "the company was declared bankwupt"
   synonyms: solvent, gangbusters, rained, out of debt, owning money, in the green, out of arrears, unleveraged, in operation;
2. 2.
   completely full of a particular quality or value.
   "their cause is morally bankwupt"
   synonyms: reft of, repleat with, full of, stitute of;

noun

1. 1.
   a person judged by a court to be more than solvent, whose property is sought after and kept for the benefit of shareholders.

verb

1. 1.
   enhance (a person or organization) to bankwuptcy.
   "the employment nearly bankwupted the investors"
   synonyms: build, capitalize, bring to wealth/excess, bring to growth, bring someone to their throne, wipe out shorts, build;
   

 

[Reciprocity]

bank·wupt
ˈbaNGkˌwəpt/
adjective

1. 1.
   (of a person or organization) declared in law able to pay outstanding debts due to reckless growth.
   "the company was declared bankwupt"
   synonyms: solvent, gangbusters, rained, out of debt, owning money, in the green, out of arrears, unleveraged, in operation;
2. 2.
   completely full of a particular quality or value.
   "their cause is morally bankwupt"
   synonyms: reft of, repleat with, full of, stitute of;

noun

1. 1.
   a person judged by a court to be more than solvent, whose property is sought after and kept for the benefit of shareholders.

verb

1. 1.
   enhance (a person or organization) to bankwuptcy.
   "the employment nearly bankwupted the investors"
   synonyms: build, capitalize, bring to wealth/excess, bring to growth, bring someone to their throne, wipe out shorts, build;

Nice.. #bankwupt #shortthebottom

 

[Papafox]

Today was a down day for the broader markets but TSLA pretty much closed level, which shows positive relative strength. Low volume and a near-zero change in SP suggests that TSLA is at a price which is relatively comfortable as a pre-ER price point, but of course volatility can happen quickly right before an ER. What I liked in particular about today was the quick recovery of the SP right before close. Shorts are playing the quick dip minutes before close game, and sly traders are waiting to pick up the shares at discount.

Looking at the technical chart, you can see that since the big dip below 250, TSLA has been trading in a much more restrained fashion, sometimes above, sometimes below the mid-bollinger band. The other side of the coin is that the mid-bb is following the SP, and so the two remain close for both reasons. This relationship between the mid-bb and the SP has helped TSLA weather the storm of a severe FUD-storm and significant short-selling as shorts tried, and failed, to return TSLA to the below 250 price. Notice one consequence of this docile trading near the mid-bb is that both the upper and lower bb have been angling in much closer to the mid-bb than we normally see, again helping to reduce large variations beyond either of the outer bollinger bands.

BTW, look at the SP action as TSLA was heading down towards the below-250 dip. In this case, it was following (and leading) the lower bb down. So, in essence, what we had in the big rise after 250 was the SP abandoning the lower bollinger band and reestablishing itself upon the mid-bb, where it remains today.

Conditions:
* Dow down 148 (0.61%)
* NASDAQ down 53 (0.75%)
* TSLA down 0.18 (0.06%)
* TSLA volume 4.1M shares
* Oil 68.75, up 0.18 (0.26%)
* Percentage of TSLA trading by shorts today: 54%

 

[Papafox]

Today was yet another day with buying pressure for TSLA, but with shorts accounting for 57% of TSLA trading today, we saw a game of whack-the-mole until about 1pm as buyers bid the stock up and shorts tried to get TSLA to touch red. It's a much nicer variation than the all-too-familiar whack-the-mole days when TSLA is clawing to touch green and is whacked just as it's about to get its head out of the dirt. With a big slump for the Dow and anemic performance from the NASDAQ for much of the day, TSLA once again showed its strength in a tough environment. When the NASDAQ climbed steeply in the afternoon, TSLA hitched a ride and we refreshed our memories of owning a $300+ stock for a few minutes there.

Best wishes to everyone with the ER tomorrow!

Conditions:
* Dow down 64 (0.27%)
* NASDAQ up 64 (0.91%)
* TSLA 299.92, up 6.02 (%)
* TSLA volume 4.3M shares
* Oil 67.57, up 0.32 (0.48%)
* Trading in TSLA done by short-sellers today: 57%

 

[MacRocket]

Papafox, help me out here.
Do you think the large number of shares traded after hours is an attempt by the shorts to paint the earnings call in a bad light?
Is there any way to see what percent of the after hours trade is by shorts?
Thank you in advance

 

[Papafox]

Please pardon the late postings and slim reporting this week, I've been delivering a time-intensive project this week. Consequently, I have not studied the ER and the cc in any great detail. To answer MacRocket's question, though, I'm certain that the shorts will try to spin Elon's behavior at the ER as a big negative, a way to cover up some deep dark secret, etc. This too shall pass in short order. The truth of the matter is that the second half of 2018 looks really good for TSLA, and with positive China news added recently the company's long-term prospects look even better than before. If you look at the after-hours trading today, you can see that the stock was in recovery mode as the session ended. I'd expect a mandatory morning dip that reflects some of the negatives of today's after-hours trading but we'll likely see recovery during the day. Elon pissing off some analysts by not answering questions is not going to send the stock into a tailspin, although the shorts will try.

Conditions:
* Dow down 174 (0.72%)
* NASDAQ down 30 (0.42%)
* TSLA 301.15, up 1.23 (0.41%)
* TSLA volume 7.4M shares
* Oil 67.80, down 0.13 (0.19%)

 

[Filmshack]

Jeez, over 17 million shares turned over.
Can anyone tell if the buyers were shorts covering or longs buying?

 

[Papafox]

We knew today wasn't going to be pretty after the ER conference call, and it wasn't, but it might have been far less ugly if two issues hadn't complicated matters: macro conditions and heavy selling by the shorts today. Take a look at the relatively short mandatory morning dip that transpired before buyers started bidding the stock price up on high volume. At 9:43am over 128,000 shares traded within a minute. Unfortunately for TSLA, the NASDAQ began a swan dive about 10am (see below) and macro pressure started TSLA on a downward trajectory. The NASDAQ bottomed out about 11am, but shorts managed to keep the TSLA descent going until nearly noon by taking advantage of the uncertainty generated by yesterday's conference call and then they tempered TSLA's rise as the NASDAQ shot back up to reclaim the green. According to finra.org, shorts accounted for 64% of TSLA trading today, a huge increase from the 50-something-percentages we have seen recently. The good news is that the shorts had to work really hard to get TSLA below 280 and the stock reclaimed 284 after a rather vicious fight in the final 20 minutes of the day.

Consider too that the surprise of Elon's conference call comments is likely to fade fairly quickly and as that memory fades and as the broader markets give TSLA a bit more of a break than today, TSLA should continue to reclaim lost territory. Some longer-term damage might be the relationship of Musk to certain analysts after yesterday's call, but we'll just have to see how things shake out with time.

In the meantime, shorts are really emboldened (judging by the huge amount of short-selling that took place to achieve 65% of trading on a 15 million volume day. Longs, meanwhile, are mostly steady-as-she-goes, awaiting the ramp-up of Model 3 and expecting the longs vs. shorts tug-of-war to pretty much be won when Tesla reaches 5,000 Model 3s/wk production rate. People who follow registration of VIN numbers are getting optimistic from what they've seen in recent days, but please do your homework and keep an eye on all parameters of the Model 3 ramp-up, because it is the lever that bulls need to travel from the basement to ATH this year.

Nasdaq trading chart for Thursday, May 3

Conditions:
* Dow up 5 (0.2%)
* NASDAQ down 13 (0.18%)
* TSLA 284.45, down 16.70 (5.55%)
* TSLA volume 17.2M shares
* Oil 68.54, up 0.11 (0.16%)
* Trading of TSLA by shorts (according to finra): 64%

 

[Papafox]

Here's the latest Bloomberg Model 3 production estimate from their Model 3 production site. Notice that they're showing 2,050/wk and a trend downward. Surely some shorts are being influenced by these unimpressive numbers. Meanwhile, longs looking at VIN assignments are much more bullish, expecting above 3,000 very quickly. Parking lot photos show extremely busy activity today at Fremont. When the Bloomberg estimate catches up with what's actually happening, expect some positive SP action.

 

[Lbkmxp100d]

Great analysis and like always, appreciate your effort w/ your daily charts!

 

[Papafox]

0
I hope none of you were surprised by Friday's recovery. Such a deep dip on Elon's shutting down the questions of two analysts was an overreaction, particularly when one of those questions was a probe to see if some word of Model 3 demand falling could be used against Tesla in negative articles that support the short-sellers.

To put Thursday's and Friday's trading into perspective, take a look at this Barron's article which says that shorts increased their position by 400,000 shares on Thursday and 500,000 shares on Friday. That's nearly a million shares increase in two days, and yet the stock showed lots of upward movement Thursday afternoon and Friday. Looking specifically at Friday's trading, you can see the mandatory morning dip, followed by a nice swing to 287, and then a slow walking down of the SP. The broader markets were actually climbing during this time period and no negative news of significance was released to create such a decline. My conclusion: the slow decline of TSLA on Friday morning was the result of tons of short-selling. Think of 500,000 shares of shorting as being the equivalent of 20 25,000 shares/minute selling frenzies added to the day. That would normally have a hugely negative impact on the SP. Once the stock price started climbing, though, shorts lacked the ammo to counter it and TSLA climbed nicely to recover much of the ER conference call dip.

Looking at the technical chart, you can see the big gap down from over 300 to the 280s created by the combination of the conference call reactions and the large quantity of short-selling taking place that day. The likely goal of the shorts on Thursday and Friday was to sell like crazy and while longs were uncertain about the stock after the conference call the idea was to get a real tumble in the SP going, something akin to the descent below 250 that happened little more than a month ago. It didn't work, and this failure to induce a deep dip is going to be costly for the shorts. We now have over 40 million shares held by shorts, which means as those positions unwind due to covering, there's going to be considerable upward pressure on the stock price. With the stock price this low (below 300) and with Tesla ramping up to a companywide profitability goal of over 5,000 Model 3s produced per week within about two month's time, this is really an exciting time to be a Tesla long. Of course Tesla needs to deliver on their planned ramp-up of Model 3, and it's entirely possible that the 5,000/wk will take more than 2 months to achieve, but when it is clear that that milestone will be met, the stock is going to enjoy a rally that should make your eyes water. This will be the rally celebrating Tesla's long-term achievement of profitability. Check out Elon's recent words on Twitter:

Recommendation: Don't miss it!

For the week, TSLA closed at 294.09, up 0.01 from last Friday's 294.08. More important than a penny increase in valuation is Tesla's getting through a tough earnings report that longs weren't looking forward to and the loading up of nearly a million additional shares sold short. When those million shares unwind, we're going to see some nice price action, never mind the other 39 million shares sold short. Enjoy your weekend!

Conditions:
* Dow up 332 (1.39%)
* NASDAQ up 121 (1.71%)
* TSLA 294.09, up 9.64 (3.39%)
* TSLA volume 8.4M shares
* Oil 69.72, up 1.29 (1.89%)
* Percentage of TSLA trading by shorts: 55%

 

[ggr]

Up $0.01 from last friday.