Yep, both Wednesday and Friday fell prey to the low volume activities of the shorts, assisted on Friday by disappointing macros. Between the first and final minutes of the shortened trading day, over 200,000 shares traded hands, which gave the shorts plenty of opportunity to reload at no penalty to the stock price before and after Friday's trading. Actually, looking at the TSLA daily chart, you don't see the deep icicles of shorting, followed by a quick recovery. Rather, you are more likely looking at subtle "assists" by the shorts, who likely helped the 10:10am dip of the NASDAQ get a bit deeper with TSLA (almost like a cliff dive at TSLA, really), and then capping so as to prevent TSLA from running uphill with the NASDAQ (such as 10:45-50ish).
It's hard to explain a dip in TSLA of over 3.5% solely with a NASDAQ dip of 0.5% or so. Some potentially negative news was Tesla's decision to cut prices in China (and accept smaller margins on sales in that country) while the tariffs are in place. It's likely a good move to keep inventory moving in the country and build good-will with the Chinese people. My understanding is that young adults in China's tech business see Tesla as THE vehicle of choice. Elon is keeping things that way as he hurries to get the Shanghai gigafactory built. Nonetheless, the move gives the bears a reason to cry "demand" again and so part of today's dip was a result of this news.
Another explanation is the simple fact that most other high-flying tech stocks had dropped considerably more than TSLA at the beginning of this week, and so the buying this week has mostly centered on Black-Friday special pricing of stocks other than TSLA. We know that ARK Invest sold TSLA and bought NVDA two days this week. ARK has high opinions of Tesla, but was simply doing what others were doing, which is buying some of the bargain stocks. Low volume this week suggests we don't have a problem with longs selling. Instead, we see investors buying sale-priced stocks elsewhere.
With macros leading TSLA to a steady drop today, short-seller manipulations were likely profitable for those who participated.
The NASDAQ peaked about 11:20am today and then descended into a loss of about half a percent
Short-sellers were tagged with 59.01% of TSLA selling today, suggesting lots of manipulations. Ironically, the telltale icicles were missing, perhaps due to macros providing the downward push and shorts instead selling to minimize the recoveries
Looking at the tech chart, notice that the lower bollinger band defined the bottom of this dip. It's a lot harder to push below that band than work within the band, and so we're bringing this advantage into next week (along with getting rid of the low-volume holiday week, thank you).
You can see that today's dip broke the pattern we've been seeing because each climb and dip combination involved higher lows and higher highs than the combination before. Today TSLA dipped below the previous recovery's low. In due time we will see TSLA position itself for the good news that's coming.
Speaking of good news, Elon has emailed employees that the company aims to produce more than 7K vehicles in a week to show capabilities both in Fremont and at the Gigafactory. We're supposed to see a final push by Nov 28, which is 5 days from Friday. Even if Tesla fails to hit the 7K figure, a production rate in the high 6Ks would be well received and would start refocusing investors on Q4 results.
Sooner or later, the macros are going to climb out of their funk. The Feds really need to look at rapidly-falling oil prices and an ailing stock market and realize that a rate hike in December is a bad idea. The trade war with China will not last. Both countries are feeling the pressure and have reason to cut a deal. Meanwhile, Tesla is profitable and will once again surprise naysayers in Q4, which should propel us to a new All Time High. I'm bullish for 2019 and am riding out this week's dip because it's not going to be a big deal when seen in the rear-view mirror.
I bought some J20 calls near close today because I am confident in Tesla's Q4 results. With higher production numbers, lower costs per car, and a lot of attention on trucking logistics, Tesla is on track to outperform once again. As with everything Tesla, I give lots of wiggle room because surprises do happen but the Tesla team has always managed to deal with them in the past, though at a cost of time. Keep in mind, too, that this stock can turn on a dime and gain even faster than it loses. We're potentially just one email to Tesla employees away from a major catalyst if this week's record attempt succeeds.
For the week, TSLA closed at 325.83, down 28.48 from last Friday's 354.31. We got our answer about the Thanksgiving holiday. Fortunately, Tesla is likely building cars at a record pace this week and this quarter, so we'll reap the benefits in early 2019, if not before. In the meantime, enjoy your weekend.
Conditions:
* Dow down 179 (0.73%)
* NASDAQ down 33 (0.48%)
* TSLA 325.83, down 12.36 (3.65%)
* TSLA volume 4.2M shares
* Oil 50.39, down 4.24 (7.76%)
* Percent of TSLA selling by shorts: 59.01%