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Papafox's Daily TSLA Trading Charts
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Today the macros were positive, especially in afternoon with the help of the Fed statements, and for the most part TSLA followed the NASDAQ in its gyrations. What really mattered to investors was the Q4 ER in after-hours trading.
The NASDAQ climbed 2.2% today, helped in the afternoon by a dovish Fed statement. Many tech stocks climbed between 4.5% and 6.5% today.
The 4Q ER
Here is the link to the letter from Tesla
Overall, Tesla produced a very positive ER. GAAP profits were somewhat below analyst expectations, but not by much. More importantly, Tesla created far more Free Cash Flow than analysts had expected. The company can comfortably pay the March notes with cash and still be sitting in a comfortable position throughout Q1. Some takeaways:
* If you remove the ZEV credits used in Q3 and one other extraordinary item, Q4 should have actually outperformed Q3. As an investor, I was happy to see such strength.
* Elon reiterated that he expects that TSLA will post a profit in Q1. This is contrary to the jabber we've heard from Reuters.
* Plans for Model 3 output from Fremont are rather tame at the moment. Even though every section of the factory has demonstrated the ability to produce Model 3 at a 7K/wk rate, Tesla is not forecasting exceeding 7K/wk until the end of the year. An additional 3K/wk is expected in year's end from the Shanghai factory so that Tesla exits 2019 producing about 10K/wk Model 3s.
* Tesla has no plans to switch Models S and X to 21700 cells from 18650s. The company is leaving open the source of Shanghai's Model 3 21700 cells to GF1 cells, Panasonic Japanese cells, and local Chinese cells.
* Model Y is not expected to be in volume production until the end of 2020. Leading candidate for production location is GF1 in Nevada. The good news is that we likely won't see Model Y distracting Model 3 buyers in the near term.
* Very significant improvements in costs continue to be made with all Teslas produced. Costs in 2019 are expected to increase by about 10% while revenues will increase by much more than that amount.
* Even if fewer S and X vehicles are built in 2019, Elon says cash flow contribution should remain the same as previous year
* Overall, Tesla is working hard to cut costs (and making significant progress). When asked if Model 3 would still produce 25% gross margins at end of 2019 even with the SR M3 introduced, Elon said "yes". Multiple questions were asked about what Tesla would do in a recession. Elon expects there to be at least 500K/yr demand for M3 even in a recession and Deepak says the best strategy in case of recession is to cut costs so that Tesla can remain cash positive even if there's a recession. Looks like Tesla has a plan that will work in a wide variety of economic environments.
The surprise announcement at ER's end is that Deepak is leaving Tesla in a few months. This is not surprising because he left once before. He's no spring chicken, has lots of money now, and surely wants to enjoy life beyond Tesla. A 35 year old Tesla VP of Finance will replace Deepak as CFO. The man spoke on the conference call and sounded calm and competent. Deepak will make himself available as an advisor. That announcement nonetheless gave shorts a chance to sell and define the ER as a negative, which explains the rather large dip from green to red in after-hours trading. In short order investors will realize that Q4 was actually pretty good, Q1 expectations are firming up, and Deepak's departure is just one of those things that happens. So, we really got all that I was expecting as possible: positive ER results, improved Q1 sentiment, and a chance for the shorts to find something wrong (Deepak's departure) and sell enough shares to set up the media to run with a story of a disappointing ER. Sigh, same old game. The good news is as Tesla proceeds into the second half of 2019, results should continue to improve, and multiple profitable quarters will eventually destroy the short thesis.
TSLA shorts were tagged with 61% of TSLA selling today as they fought (unsuccessfully) to keep TSLA below 300 going into the ER.
Conditions:
* Dow up 435 (1.77%)
* NASDAQ up 155 (2.20%)
* TSLA 308.77, up 11.31 (3.80%)
* TSLA volume 11.3M shares
* Oil 54.21
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adiggs
Well-Known Member
I think the smoking gun will only help get the SEC to do something if there's also a dead body at the scene, and the ballistics is a no-doubter match.
Even then, one cannot help but recall the words of Carmine the Bowler's daughter: "Yes, the police said he fell down an elevator shaft. Onto some bullets."
As we last left off, TSLA had climbed over $11 on Wednesday as enthusiasm for the ER plus good macros from an afternoon Fed announcement pulled the stock higher. TSLA lost some of that $11 gain during after hours during the ER and CC, but the bottom fell out after Deepak announced his retirement and TSLA lost that $11 gain for the day plus another $3 or so as longs anticipated a selling spree by shorts on the Deepak news and there was a rush to sell before the other guy.
Fast forward one day. With time to digest the ER, investors started returning. The pre-market price for TSLA began similar to the ending after-hours price yesterday, but as pre-market trading proceeded, TSLA started climbing. More than 200,000 shares traded hands in the first minute of trading as some traders who sold yesterday got back in. The shorts executed a thrilling early MMD, but with the NASDAQ trading in the green and climbing and with most traders feeling the good news of the ER outweighed the Deepak departure, the mandatory morning dip didn't stand much of a chance. It transitioned into green and could have gone noticeably higher except I believe the shorts started capping and pushed TSLA into a "whack-the-mole" game that continued for the rest of the day. After all, the media was kind enough to post headlines such as "Tesla stock falls after company's Q4 earnings miss," and it just wouldn't be polite for the shark to let the crocodile down and allow a green day after all that work to create negative headlines. Thus, shorts kept the pressure on TSLA to keep it red today. The good news is that TSLA regained almost all of that $11 gain of yesterday that was lost after hours.
The NASDAQ climbed 1.37% today with fairly stable trading in afternoon, not giving shorts an excuse for a push down of TSLA during the low-volume afternoon hours
Shorts were tagged with 56% of TSLA selling today as they unsuccessfully tried to hold onto the gains from the Deepak departure dip orchestrated during after-hours trading. The shorts could have been much more successful today if the NASDAQ was down or took a big dip in afternoon hours, but such a setup wasn't in the cards for today.
Looking at the tech chart, you can see that TSLA's bounce off the lower bb is still secure, much to the chagrin of you know who.
Conditions:
* Dow down 15 (0.06%)
* NASDAQ up 99 (1.37%)
* TSLA 307.02, down 1.75 (0.57%)
* TSLA volume 12.6M shares
* Oil 53.93
On Friday, TSLA noticeably outperformed the NASDAQ as the stock reclaimed lost territory from Elon's warnings about expectations for 4Q and 1Q results. With the substantial positive cash flow of Q4, many on the Street have given a sigh of relief.
Pertinent news on Friday includes Tesla Model 3 rated as the highest-satisfaction vehicle in the Consumer Reports survey.
The NASDAQ closed down 0.25% on a day with some morning trading in the green and afternoon trading in the red. The trajectory of TSLA largely followed the NASDAQ but with a more positive performance throughout the day.
Shorts were tagged with 51% of TSLA selling on Friday, a big decline from before the ER. With this reduced manipulation pressure, TSLA rose despite the NASDAQ's dip.
Looking at the tech chart, you can see that TSLA is close to topping the 200 day moving average and then the mid bollinger band. There's no guarantee that it will climb all the way up to the upper bb yet because there remains some concerns about Q1 and whether it will indeed produce a profit.
So, where does TSLA go from here? Again, the safest bet is to position for a longer investment horizon. Here are a few catalysts, both positive and negative that we should see during 2019.
Improved battery costs and performance- This article suggests that Tesla continues to make significant improvements in its battery cells (although the patent applies to a chemistry not used by Tesla in vehicles at present, similar improvements are likely being realized on the vehicle battery chemistry front. We also know that Supercharger 3 will be announced at some point. My guess is that vehicles will need the improved chemistry to take full advantage of Supercharger 3, and at some point we will see an announcement that all Model 3, S, and X vehicles that have already been produced after such and such a date are capable of the improved charging rates of Supercharger 3. We get a bump up in the SP when the announcement comes but because of Osborne effect, Tesla cannot let the cat out of the bag until the right chemistry is already in all it's vehicles under production.
Improved Autopilot performance and real progress with Full Self Driving- We know that Tesla hardware 3.0 for autopilot and FSD is coming soon, but we don't know the exact date. Tesla cannot really speak of the improvements of a 10X increase in processing speed and improved software from the new hardware until that hardware is readily available and being installed in vehicles (again, due to possible Osborne effect). Two big positives come about with the combination of hardware 3.0 and improved software to operation it. First, more people order both autopilot and Full Self Driving. The FSD upgrades will include people who have the older autopilot computers in their cars but want them swapped out with hardware 3.0 boards so that they get the improved autopilot performance and the likelihood of Full Self Driving someday. Thus, we see a nice revenue increase. Secondly, if Tesla can demonstrate that with improved software and with hardware 3.0 it is a real contender for reaching Full Self Driving before the competition, suddenly there's a need to revalue Tesla stock upwards. Last summer, Morgan Stanley valued Waymo at up to $175 billion. That's three times higher than TSLA's current market cap. You can see the enormous increases that can come to Tesla's valuation if the industry starts recognizing it as a real contender in the race toward full self-driving. Right now little if any valuation of TSLA is due to autonomous driving. Let's hope the combination of hardware 3.0 and new software raises eyebrows and TSLA valuations. We don't know exactly when we learn about hardware 3.0 being installed in future Teslas and we don't know when the software will be robust enough to cause a big spike in TSLA value, but it's possible such news could come soon. It's also possible that the market could remain skeptical about Tesla's chances in the full self driving competition.
China and the U.S. Economy- Right now, Tesla is playing it safe and taking on an expansion strategy that would still work, even if the negotiations for a trade deal between China and the U.S. drag on. My guess is that there will be progress in the trade deal sometime in 2019 simply because the current situation and the situation after more tariffs are applied is so harmful to China's economy. Reaching March without a deal and seeing both sides increase tariffs would, of course, create negative pressure on our stock until the situation is resolved. The U.S. has the upper hand in the negotiations at present. There's a chance a deal is reached before the U.S. applies more tariffs (and China retaliates) in March. We'd get a nice SP bump not only because the market would go up but also because Tesla's ability to profitably sell in China has improved substantially. The end of a China trade war would likely spur the world economy and lessens the chance of a recession, which, again, would be good for stock prices and especially prices of auto stocks.
Model 3 gross margins to 25%- In the Q4 conference call, Elon replied affirmatively to a question about Model 3 margins still being on track to rise to 25% before year end. Currently, they are about 20%. The huge challenge is that average sales prices will be declining during this period, which means that we'll need to see substantial cost improvements in Model 3 manufacturing economies. Wall Street and especially the shorts are likely to expect a fail here. The good news is that gross margins from the Shanghai factory should be very good, considering the reduced costs of producing in China and then delivering there. As the year progresses, if Tesla can demonstrate progress in GM of M3, then the SP will rise. Degradation of the GM would likely produce the opposite effect. Model 3 gross margins are the biggest challenge of the coming year. Keep a close eye on this metric.
Timing: My point is that it will be extremely difficult to time your TSLA investments this year since we don't know the timetables for the release of critical information. Again, I would urge a longer time horizon on your investments in TSLA so as to be in place to take advantage of positive developments and weather the storm from any negative events. In time, Tesla is poised to create tremendous value, but the timetable for that value is hard to nail down, and the gross margins of Model 3 will be under tremendous scrutiny this year.
For the week, TSLA closed at 312.21, up 15.17 from last Friday's 297.04. Enjoy your weekend.
Conditions:
* Dow up 64 (0.26%)
* NASDAQ down 18 (0.25%)
* TSLA 312.21, up 5.19 (1.69%)
* TSLA volume 7.2M shares
* Oil 55.26 (on Feb 2)
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Tesla won't be swapping computers early, unless they want to get a jump on the conversion. HW3 is not going to improve EAP performance (based on Elon's tweet*). So the off menu FSD will likely stay in anti-sell land until it is officially rolled out.
*
I do agree that current owners will be springing for the FSD upgrade once it exists.
Today was a promising day for Tesla:
* Broader markets were up because Tech stocks were anticipating a good ER by Alphabet
* Tesla acquiring battery tech maker Maxwell Technologies through stock issuance
* Volkswagen to deploy Tesla PowerPacks in its Electrify America charging network
Why then did TSLA plunge $10 on opening and barely manage a green finish? If you know me, you already know the answer: manipulation by shorts. Seriously, what major stock you follow routinely plunges shortly after opening, only to recover fairly quickly? What other tech stock routinely gets involved in a "whack-the-mole" game where the stock descends every time it threatens to turn green? To answer this question, let me first bring the NASDAQ chart below into view so that you can understand how crazy Tesla's gyrations today were.
The NASDAQ closed up over 1% today, with both the Dow and NASDAQ zooming up in final minutes
Today was a big threat to shorts because they've already seen short interest descend from about 35% of float to below 20%. In the week leading up to the 4Q ER, we were seeing short covering along the lines of 400,000 to 800,000 shares/day. Only through significant manipulations were the mega-shorts able to keep a panic from ensuing in the short population. Since the ER, short interest has more or less stabilized around 19.5% of float. I'll speak up when I see another trend developing.
Here's what you need to know about today's news, however. One bear thesis out there is that Toyota or some big auto company would secure a patent to produce the next generation of ultra-capacitors, which would be better than Lithium Ion batteries and their vehicles would become the "Tesla killers". By acquiring Maxwell Technologies, Tesla is staying on the forefront of ultra-capacitor research and another bear thesis has just been likely rendered moot. Perhaps more importantly, however, Tesla may have a more immediate implementation for the electrode research that Maxwell has conducted. For very little dilution, Tesla has made an excellent acquisition. Bravo!
The Volkswagen announcement is positive because as other OEMs enter the BEV space, Tesla will have opportunities like this to leverage their advances in technologies to support the growing EV infrastructure and profit from it.
Many TSLA investors, including myself, were expecting to see a pop to ATH by the time of the 4Q ER, but slower growth of M3 production, slowing sales of energy credits, macro woes, and a full-court press by the shorts (characterized by the FINRA percent of selling attributable to short-sellers numbers running near or above 60% in recent weeks) has delayed that breakout for now. These daily manipulation efforts that can chip away at $4 or more of daily gains add up. The good news? Eventually a good quarter comes along, positive information is released, and TSLA makes a big move upward. Short manipulations can delay a run-up, but it can't indefinitely delay the inevitable revaluation of TSLA. If the good news keeps coming, sooner or later the stock price will make up for lost time. In the meantime, however, I expect plenty of pressure by the shorts on TSLA until the end of the February dates when a climb above $360 no longer has the ability to bring about a 50/50 distribution of cash and stock for Teslas notes that will be paid in March.
Percent of selling tagged to TSLA shorts increased to 54% today as the die-hard shorts increased manipulation pressure on TSLA.
As for tomorrow, the Google 4Q results were mixed, with some positive and some negative aspects. In after-hours trading, GOOG was down about 1%. The jury is out on what macros will do.
Conditions:
* Dow up 175 (0.70%)
* NASDAQ up 84 (1.15%)
* TSLA 312.89, up 0.68 (0.22%)
* TSLA volume 7.3M shares
* Oil 54.83
adiggs
Well-Known Member
My own interpretation (which doesn't make me right - just how I see things), is that if I were short, I would be happy to see the overall short % descending. One of my simplistic rationales for not even considering shorting Tesla is that it's an overcrowded trade. So seeing the crowd dissipate (20% of float is still a really high number - it's just not stupidly high like 35%) is a good thing (if I were short).
To the degree that the lowering short interest is reducing the number of people committed to daily market manipulation to keep the stock price low, I guess that would be a bummer to me (as a Tesla short). But the way I see it, whether somebody has an active short position or not, they still have the ability to do short manipulation and continue making money on short term short / swing trading (given that people are able to do that consistently).
I welcome other points of view and how others interpret things differently. The bummer from my point of view as a long, is it looks like the tension in the spring is getting released slowly, reducing the likelihood of an artificial jump in the stock price due to a short squeeze. But my personal investment thesis doesn't need a short squeeze to be successful - just time, and a whole lotta gross profit growth, both of which I foresee arriving over the next 10 years.
pz1975
Active Member
I agree with this. It is disappointing to see the short interest dropping at the same time the SP has dropped/stagnated. I had expected a gradual rise as short interest dropped, but this implies that as many or more longs (likely institutional) have sold recently, allowing the shorts to exit without any sort of SP rise.
EVNow
Well-Known Member
I think the idea of a short squeeze (like VW) was always a pipedream. There are enough people apparently willing to lend shares - so unless something dramatic happens (like Apple announcing they are going to take a big stake in Tesla or something similarly weird) - there won't be a short squeeze.
I also don't see a natural tipping point - after which all the shorts will suddenly fold. I won't be surprised to see Tesla SP range gradually move up, but with a lot of volatility and short interest slowly but surely come down to normal levels over the next 3 years.
anthonyj
Stonks
That MMD this morning is something I can’t wrap my head around. No other large cap stock moves like TSLA, I really don’t understand it. It’s so predictably unpredictable
I find the conversation interesting about what motivates the shorts. @adiggs , your point makes plenty of sense. An overcrowded short is indeed a dangerous place if significantly good news arrives. On the other hand, I think so many of the small shorts are follow-the-leader types and they're looking for easy money. When a big portion of the short population is getting out, the decline really requires that those who remain in take a serious look at their reasons to continue.
As for squeezes, while I never expected a VW type of squeeze I certainly was hopeful for an accelerated climb as the shorts started to bail. What I found interesting leading up to the Q4 ER was the combination of maybe half a million shares covered a day and high percentage of selling by shorts. There was upward pressure on the stock price from the covering, but the manipulations such as big mandatory morning dip and selling into the close managed to mostly compensate for much of the covering. I think manipulations by shorts are most powerful when traders aren't aware that a manipulation is underway. That's why manipulations are so often disguised as reaction to FUD, overreactions to a macro-induced dip, or something of that type. The other ingredient in successful manipulations is some dread felt by investors, and with lower guidance for Q4 and Q1 profits, some dread existed.
As for squeezes, while I never expected a VW type of squeeze I certainly was hopeful for an accelerated climb as the shorts started to bail. What I found interesting leading up to the Q4 ER was the combination of maybe half a million shares covered a day and high percentage of selling by shorts. There was upward pressure on the stock price from the covering, but the manipulations such as big mandatory morning dip and selling into the close managed to mostly compensate for much of the covering. I think manipulations by shorts are most powerful when traders aren't aware that a manipulation is underway. That's why manipulations are so often disguised as reaction to FUD, overreactions to a macro-induced dip, or something of that type. The other ingredient in successful manipulations is some dread felt by investors, and with lower guidance for Q4 and Q1 profits, some dread existed.
I think MMDs are hard to comprehend if you are looking toward the longs as the primary explanation. There just wasn't an apparent justification for Monday's MMD. Trading was up in pre-market, the macros opened up and began running higher, and there was no negative Tesla news of importance. Someone was interested in both buying and selling shares because over 100K shares were traded in the first minute. At 9:32am we saw over 30K shares sold and at 9:37am we saw over 90K shares sold in a minute's time. If you were a big institution and wanted to lighten your load of shares, you wouldn't sell in massive quantities like that. Seriously, who besides a manipulating short would be selling in that fashion?
Today TSLA got its mojo back. I'd like to say that it was because the shorts ran out of ammo and this is what a typical trading day would like like without them, but the truth is that shorts were tagged with not much different a percentage of selling today than yesterday. Something else was at work. You can see that on Monday there was a noticeable correlation between the NASDAQ's chart of TSLA's, but that connection was much less pronounced today. For news, it was a bit negative with a Morgan Stanley small downgrade. On the other hand, yesterday's news about Tesla acquiring Maxwell might have taken a day for investors to figure out the advantages that Tesla will be gaining. Might a big investor be acquiring TSLA shares? It's possible, but volume was actually down from 7.3M to 6.7M shares.
Yesterday's trading included about 166,000 shares covered by shorts, according the the short sight email, so perhaps that covering trend accelerated today. We'll know tomorrow.
Today the NASDAQ gained 0.74%, not as much as yesterday but TSLA did much better all the same
Comparing the TSLA daily chart to the NASDAQ's, you can see the rapid climb of both in the opening minutes of market trading, and this NASDAQ run upwards likely scuttled any chance of a successful MMD by the shorts soon after opening. You can see an exaggerated dip in TSLA when the NASDAQ dipped slightly about 10:15am, but buyers quickly erased that attempt. Most noticeable was the NASDAQ's dip that bottomed out around 1:20pm, and TSLA showed unusual strength in not following the NASDAQ down. Finally, I made this post in the main thread, suggesting shorts might try to push TSLA down in the final 30 minutes and if the dip became sluggish there was the chance that it would reverse into a climb to close, both of which happened. I think shorts were doing their best to screw up TSLA's gains today, but that buying thwarted their efforts. Let's look at tomorrow's short sight email to try and understand if it was longs or shorts doing the buying today.
Shorts were tagged with 51% of TSLA selling today, down slightly from yesterday's 54%
Looking at the tech chart, what's most apparent is the well-defined uptrend for TSLA after our bounce off the lower bollinger band a couple weeks ago. Good news is that TSLA crossed both the 200 DMA and the mid bollinger bands today, setting itself up for some (hopeful) support if needed.
Will TSLA continue upward until it reaches the upper bb? Like many of you, I believe that answer is more affected by news than simply by technicals, but I have seen in the rearview mirror how powerful technicals can be (such as bounces off the upper or lower bollinger bands) and so a trader really needs to consider both. How often, then, has TSLA run up to the upper bb after bouncing off (or approaching) the lower? Looking at this chart, here's what I came up with:
* Reached the upper bb:6 (60%)
* Almost reached the upper bb 2 (20%)
* Reversed short of the upper bb:2 (20%)
How you read the chart may result in your numbers being different than mine, but I find the number of runs from the lower bb to the upper bb to be surprisingly high. Tempering my expectations is the great distance between the bollinger bands at present, vs. the distance at many times in the past.
Conditions:
* Dow up 172 (0.68%)
* NASDAQ up 55 (0.74%)
* TSLA 321.35, up 8.46 (2.70%)
* TSLA volume 6.7M shares
* Oil 53.66
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News:
* Tesla lowers cost of all U.S. Model 3s by $1,100. This is a big deal and let me show you why. The new cost of a medium range M3 in the U.S. is $42,900. Now subtract the $3750 credit and you have $39,150. That price is a mere $4,100 more than a bare-bones standard range M3 with no PUP. There's very little incentive now to wait for the bare bones M3 when a longer-range, better-equipped M3 is available right now. First quarter is a historically difficult time to move vehicles, and so the cut comes at a good time. I suspect Tesla will see some nice increases in Model 3 production in Feb and March, and it wants to be sure there are buyers standing by for those cars. The Grohmann machine that will build the Model 3 standard range batteries will soon be in place, and we'll likely see Model 3 SR with pup offered by mid-year or thereabouts.
* Tesla and Daimler in talks about collaborating on an electric van. A collaboration between Tesla and Mercedes would be a good thing for both companies.
Putting the two pieces of news into perspective, I think the lowering of M3 pricing by $1,100 hurt the SP today and we would indeed see some longs selling for fear that the price cut suggests low demand. I think the reality is that the cut is used to get the many fence-sitting SR M3 reservation holders to get off the fence and go for a MR in this historically slow quarter. The dip in price is not surprising, given the news. Let's get this cut behind us so that TSLA can regain its mojo.
The NASDAQ lost 0.36% today.
Comparing the TSLA chart with the NASDAQ chart, you can see that TSLA's MMD coincided with a sizeable dip by the NASDAQ, too. The TSLA dip was exaggerated, so I would give the shorts some points for a successful manipulation there (up until the point where it unwound). Where the two charts really differ is in the final 35 minutes. It looks like the shorts started a push down at that time, buyers made a counter move, and then shorts hit the selling hard in the final minute or two to generate a bigger dip than was justified with the day's trading. All in all, though, with the M3 price cut news out today, I think TSLA did okay.
Shorts were tagged with 52.5% of TSLA selling today, up slightly from yesterday
Short sight: short interest was up 0.13% yesterday (0.0013 x 128 mil = 166,400 shares new shorting of TSLA), which exactly unwound the 166,400 shares covered on Monday.
Conditions:
* Dow down 21 (0.08%)
* NASDAQ down 27 (0.36%)
* TSLA 317.22, down 4.13 (1.29%)
* TSLA volume 5.0M shares
* Oil 53.97
EVNow
Well-Known Member
Except for the last 13 minutes, when Tesla kept going down but Nasdaq went up and then down.In my opinion, there was almost no manipulation today. It followed other big tech stocks and the Nasdaq chart perfectly. Pathetic volume too. We will go higher
Also, the MMD was quite strong. Nasdaq went from 7380 to 7350. Tesla, which was trading much higher than Nasdaq went from 323.4 to 315.62. So Nasdaq went down < 0.5%, but Tesla went down 2.5%. The final result was Tesla closed 1% below Nasdaq. These 1% add up - and that's why we don't see Tesla moving in the last 1.5 years.
Today, word of tough sledding in the U.S./China trade negotiations caused the macros to drop. Tough sledding is inevitable, however, with the U.S. seeking to rein in the rampant software piracy, among other issues, and bring China into the tent of nations honoring intellectual property rights. Trade and tariffs is only part of the equation.
The NASDAQ lost 1.18% today, bottomed out about noon and began a slow recovery
Comparing the two charts, you can see at least one prominent icicle likely formed by short-sellers adding steroids to the downward motion of TSLA today. TSLA started losing ground after 2pm even though the NASDAQ was rising during that time. I'm unaware of news that would justify the afternoon's action.
Tech stocks I follow were down from about 1.6% to 3.6%, putting TSLA once again on the high side of that dip, and I credit the severity of the noon dip, likely aggravated by short-selling, as a likely explanation.
Shorts were tagged with 51% of TSLA selling today
Looking at Dusaniwsky's graph, you can see the big covering by shorts took place in the days leading up to the Jan 30 Q4 earnings report. Since then, shorting and covering has been relatively balanced. Also noteworthy is the $4.66 billion losses that shorts have taken since Dusaniwsky began keeping track of short activities at Tesla.
Looking at the tech chart, you can see TSLA still well above the lower bb bounce price. Shorts would love to build upon the past two days of dip and project a downtrend, so don't be surprised by a MMD tomorrow. On the other hand, European deliveries of Model 3 began today, and at least two ships filled with Model 3s are en route to China, so good news is likely to start making its way into the news cycle before long.
As a final note to the day's trading, I include a link here to a CNBC story from yesterday about General Motors CEO Mary Barra that the company is going "all electric". Details are slim but the overall message is clear. GM recognizes that electric vehicles are the future. Elon Musk has already won in Europe, where countries are setting drop dead dates for the sale of ICE vehicles, and the GM announcement suggests that U.S. automakers are accepting the reality as well. A cleaner world awaits. Sooner or later, Wall Street will accept these realities too and as Tesla continues to create a billion dollars of free cash flow most quarters, the stock price cannot help responding positively at some point.
Conditions:
* Dow down 221 (0.87%)
* NASDAQ down 87 (1.18%)
* TSLA 307.51, down 9.71 (3.06%)
* TSLA volume 6.5M shares
* Oil 52.28
I think this news played a role maybe ?
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