Short-Term TSLA Price Movements - 2014

[chickensevil]

I did some research and apparently double tops tend to have mid/high volume sell offs during the second top while cup and handles tend to have low volume handles. Also, double tops have a more angular "V" shape while cup and handles have a "U" or bowl like shape.

This was very great and informative post. Thank you. Expert or not, you explained this very well. I did dig up something on the timeframes which more answers my question:

"As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for four days to four weeks... then it takes off."

So it seems like tomorrow/friday (depending on when you think the top was technically hit, since the highest closing price was achieved on Friday, but the intraday ATH was set on Monday) might be the end of this trend with the start of the run on the next day. Given how big this cup was (28 weeks) that would likely make it trade sideways a bit longer than the 4 days... I would guess even next week might be a trending down week, and after that we should start to see it pop up. Of course a positive news hit would likely pull us out immediately.

The safer bull call would be to plan out 6 weeks at around a 270 target and place your bets for there... since we should start the run at the 4 week mark at the latest. If it runs up early it might be wise to sell off those calls or go ahead and roll them forward. I would say 12 Sept at the latest for the end of the handle and target the calls for 26 Sept. I think anything later than that is going to get dicey since there is still a LOT of uncertainty once we get into serious Q3 outlook... which 26 Sept would be a nice cutoff before people can even start to get serious estimates on how many deliveries they made for Q3, so if we are still uncertain on the direction that will take you would have a nice window to pull out and wait for the uncertainty to clear.

Just my reading of the tea leaves... But we do have a couple things still sitting out there unresolved which we could hear about any day...

gigafactory news: CA legislature session ends Aug 31. Someone is bound to stumble upon another mysterious GIANT dirt pad being constructed (hard to hide) and Tesla could surprise us all and announce any day that they have settled in on a final site.
Model X: The Alphas are made, but noone has seen them (or if they have, they aren't talking). The wording was that this is not your normal Alpha and they had serious design intent in this car. Because of that, they may decide to show it off rather than wait for the Beta (plus it would actually give them the Beta's to make changes on after feedback as well as a change opportunity after feedback from Beta to Prod.)

Both of these things are likely to make big news and move the stock.

 

[Causalien]

From my experience, a double top (or M) has a sharp drop when realized. From my experience trading it is that it is a good place to trade with strategies that goes both ways. An M has the effect of slowing down the ascent, but I've seen my share of stocks where it pierces through and once it goes through, the rise is pretty hard.

 

[chickensevil]

From my experience, a double top (or M) has a sharp drop when realized. From my experience trading it is that it is a good place to trade with strategies that goes both ways. An M has the effect of slowing down the ascent, but I've seen my share of stocks where it pierces through and once it goes through, the rise is pretty hard.

Right which would either indicate a hard crash down (likely back into the low 200s) or a sharp rise (up into the 300s) I picked 270 just because it wouldn't rely on it going but to 275 (at current pricing) by the 29th at the absolute latest, and with time decay is likely to hold value a bit better over some other much higher target... So it should be pretty easy to see which way the stock is going to roll... more sideways would be a handle and sharp drop would be an "M". If you wanted to play both sides, I would target 240 with the puts... which even with the sideways trading you are likely to still make out positive if you can manage to dump out before it rises back up if that is the direction it is going to take. Which brings us full circle into answering the question that was asked the other day of how to trade for the short term (pre-Q3 earnings).

Note I am suggesting 240 since that is one of the current support points thereabouts, if I am not mistaken.

Would appreciate other input on this for sanity checks though to validate or blow holes in my thinking here.

 

[Wenche]

This may be new as of the past hour: Tesla initiated by CSLA with a 300 dollar price target.

CLSA Initiates Coverage on Tesla Motors, Inc. at Outperform, Announces $300.00 PT | Benzinga

This is very interesting!

http://en.wikipedia.org/wiki/CLSA

Type	Private
Industry	Diversified financials
Founded	Hong Kong (1986)
Headquarters	Hong Kong
Key people	Jonathan Slone Chairman and CEO
Products	Financial services
Employees	1,400 (2014)
Website	www.clsa.com

CLSA

"CLSA is Asia's leading equity brokers and investment groups focused on institutional broking, investment banking and asset management to corporate and institutional clients around the world.[SUP][1][2][/SUP]
France’s largest retail-banking group, who sold CLSA to CITIC Securities, China's largest brokerage in July 2013.
Unlike most of its competitors, CLSA is a research-driven agency broker."[SUP]http://en.wikipedia.org/wiki/CLSA#cite_note-3[/SUP]

Welcome to the institutional brokers, investment banks and asset managements
from China

 

[Jack6591]

California vs Texas

Right which would either indicate a hard crash down (likely back into the low 200s) or a sharp rise (up into the 300s) I picked 270 just because it wouldn't rely on it going but to 275 (at current pricing) by the 29th at the absolute latest, and with time decay is likely to hold value a bit better over some other much higher target... So it should be pretty easy to see which way the stock is going to roll... more sideways would be a handle and sharp drop would be an "M". If you wanted to play both sides, I would target 240 with the puts... which even with the sideways trading you are likely to still make out positive if you can manage to dump out before it rises back up if that is the direction it is going to take. Which brings us full circle into answering the question that was asked the other day of how to trade for the short term (pre-Q3 earnings).

Note I am suggesting 240 since that is one of the current support points thereabouts, if I am not mistaken.

Would appreciate other input on this for sanity checks though to validate or blow holes in my thinking here.

Jerry Brown and crew are still stewing in their juices over Rick Perry and Texas stealing Toyota away from California. While I see California at a disadvantage because they must make the first move, I expect them to put together a great plan for Tesla. They will set the bar high. Since California must enact any legislation before August 31, we will know before the end of the month. One of two things California plays to win, or Texas goes all in to get the Gigafactory. In either case, Tesla wins big. Any legislation passed by California will be public knowledge.

 

[Papafox]

My Impressions of today's Price Action

I see TSLA in the consolidation phase following it's second run up above the 260 price point. Normally, you would expect profit-taking to knock the stock price down 10s of points after such a hefty run has peaked, but this run is unique because it is based upon important news (Tesla and Panasonic have a deal for building the gigafactory) and some very positive mid-range projections by the company (100,000 cars/year delivery rate by end of 2015). We now see the typical shorts vs. longs battle to see if a fear-producing price dip can be induced within the next few days.
* 9:34am (four minutes after opening), a spike of selling knocks TSLA down to nearly 253. If the shorts can induce a drop below 250, the stop-loss orders of many shareholders might be activated, bringing a further drop. No go, the stop heads back up.
* 10:48am TSLA zooms up to 258.5 in moderate trading
* Remainder of day- stock trades up and down near 255

Conclusion- Considering the points gained in the recent runup, the stock is resisting consolidation quite well. A day with positive results would help stabilize TSLA until positive catalysts enable the climb closer to the $300+ estimates set by an increasing number of optimistic analysts. No doubt shorts are jumping on board right now as they hope for a repeat of the previous fall from $260+ pricing, but members of this forum know that conditions have changed markedly for the better at TSLA since that first $260+ climb. If TSLA can stabilize above $250 as shorts jump on board, then we will be well set up for a fairly steep rise at some point when the positive catalysts cause the inevitable climb.

 

[vgrinshpun]

We have another bank initiating coverage of TSLA with an outperform rating and price target of $300 - Credit Agricole (France)

Tesla Motors Receives New Coverage from Analysts at Credit Agricole (TSLA) | WKRB News

 

[Curt Renz]

Check out Jim Cramer answering a viewer's TSLA question on CNBC this evening, "I think it goes higher, not lower." It lasts 30 seconds from 7:10 to 7:40 within this video: http://video.cnbc.com/gallery/?video=3000303701

 

[MikeC]

This may be new as of the past hour: Tesla initiated by CSLA with a 300 dollar price target.

CLSA Initiates Coverage on Tesla Motors, Inc. at Outperform, Announces $300.00 PT | Benzinga

We have another bank initiating coverage of TSLA with an outperform rating and price target of $300 - Credit Agricole (France)

Tesla Motors Receives New Coverage from Analysts at Credit Agricole (TSLA) | WKRB News

Just came across this on thecontrarianinvestor, posted by kjs - I am wondering if these are the same upgrade:

"There appears to be some confusion regarding Mark Heller's employer. It is my understanding that he works for CLSA. CLSA used to be 65% owned by Credit Agricole until it was sold to CITIC in China last summer. Some sites use CLSA and Credit Agricole interchangeably when talking about Mark Heller but that has not been accurate for about a year. I believe he works for CLSA (which is now owned by CITIC and not Credit Agricole) and it was under the CLSA banner that he issued the two recent ratings."

 

[TSLAopt]

This is very interesting!

http://en.wikipedia.org/wiki/CLSA

Type	Private
Industry	Diversified financials
Founded	Hong Kong (1986)
Headquarters	Hong Kong
Key people	Jonathan Slone Chairman and CEO
Products	Financial services
Employees	1,400 (2014)
Website	www.clsa.com

"CLSA is Asia's leading equity brokers and investment groups focused on institutional broking, investment banking and asset management to corporate and institutional clients around the world.[SUP][1][2][/SUP]
France’s largest retail-banking group, who sold CLSA to CITIC Securities, China's largest brokerage in July 2013.
Unlike most of its competitors, CLSA is a research-driven agency broker."

Welcome to the institutional brokers, investment banks and asset managements
from China

Good info, thanks. I had never heard of CLSA and immediately emailed a friend of mine who works as a financial professional in Hong Kong to ask about CLSA and this was his response:

-------------------
Hope all is well on your end.
Yes most of the hedge funds and asset managers normally have access to their
reports. CLSA are generally seen as a quality research house and have a lot
of corporate access.
Hard to say about the market influences but I have spoken to the managers
and they take a closer look to CLSA reports, compared to the investment bank
research house reports.
------------------


I think know the premarket doesn't look like anything special but this CLSA and Credit Agricole rating combined could result in a couple of very nice up days today and tomorrow, possibly a new ATH in my speculative opinion.

 

[chickensevil]

This report should definitely help influence stock stabilization until we get a positive catalyst from the company to shoot us up. I wouldn't think it would drive the stock into a break out (I mean this isn't MS giving the report /joke) but it should help prevent this from being a double top (or M) for sure. I would anticipate a continued trend of "handle forming" at least until next week some time...

- - - Updated - - -

Also regarding the premarket, the report likely did help move us from a negative pre market to a positive since if you look the details of that came out well after evening after hours in which we were decently negative, and then in the morning we were decently positive. So it clearly had some affect on the state of the stock.

 

[MartinAustin]

Check out Jim Cramer answering a viewer's TSLA question on CNBC this evening, "I think it goes higher, not lower." It lasts 30 seconds from 7:10 to 7:40 within this video: http://video.cnbc.com/gallery/?video=3000303701

That's a pretty big deal considering Cramer's reputation on this forum! Though he sounded kinda despondent about it, he was saying he thinks TSLA is going to go up.

I think the Cramer haters on here are going to have to pack their bags...

 

[ckessel]

I think the Cramer haters on here are going to have to pack their bags...

A infinite number of Cramers spouting an infinite amount of gibberish will eventually say something right.

 

[The Blue Owl]

That's a pretty big deal considering Cramer's reputation on this forum! Though he sounded kinda despondent about it, he was saying he thinks TSLA is going to go up.

In the 7-8 minutes before he got the listener question about TSLA, he had discussed, at length, why it was very important for a company to have good management, and he nominated Sears' CEO for the "CEO Hall of Shame". However, when the discussion about Tesla came about, he failed to mention the stellar management. Instead, he went with "it's a cult stock" as the reason for his prediction.

So, no, he doesn't get it.

I think the Cramer haters on here are going to have to pack their bags...

Hate seems to have become the word du jour applied to any criticism. Pointing out how wrong he has been all along about TSLA is not hate. It's fair game for a widely followed financial news personality who makes his living by dispensing investment advice "to make you more money" (his words). It's also relevant when discussing the wide disparity in understanding of this company and stock that exists among market analysts and commentators.

 

[chickensevil]

Looks like we are continuing to follow the same consolidation trend for forming the handle today, which I take as a pretty solid bull signal. I am pretty sure if this was a double top we surely would have tanked by now...

 

[AlMc]

Looks like we are continuing to follow the same consolidation trend for forming the handle today, which I take as a pretty solid bull signal. I am pretty sure if this was a double top we surely would have tanked by now...

What I have come to learn about TSLA (as with many stocks) is that trying to predict their movements in the short run is almost impossible. The ONLY time I was sure of a large positive move for TSLA in the last year was the Detroit Auto Show. Even then I was wrong about the catalyst. I was convinced that there would be a BIG reveal about either an AWD S or the X. Did not happen. The big move came from something I did not predict.....a huge 'beat' announcement about deliveries and GP.
So, I use some DD, help from opinions on these boards (including charts) to try to come up with occasional short term option plays....However, in the end I owe most of the success I have on short term gains to luck.

 

[ev-enthusiast]

Looks like we are continuing to follow the same consolidation trend for forming the handle today, which I take as a pretty solid bull signal. I am pretty sure if this was a double top we surely would have tanked by now...

After the post ER run-up I expected a bigger drop during the last couple of days.
I still have one half of my medium term calls (220 to 280 Sept exp) as well as some cash on the sidelines.
After todays price movement I feel confident to hold the medium term calls for the next couple of days and I am thinking about a good strategy to deploy some of the cash.
Any advice on a good strategy for the next couple of weeks?

Thanks in advance and happy investing!

 

[sundaymorning]

Looks like we are continuing to follow the same consolidation trend for forming the handle today, which I take as a pretty solid bull signal. I am pretty sure if this was a double top we surely would have tanked by now...

I don't see a double top "M," instead I see a double dip "W" from f*r* incident to $260s then back to where we're at currently makes more sense. Businesses love to name their products as it brings better marketing, take for instance those whiskey shots you can buy from a bar, instead of calling it whiskey they'll call it something obscure like "sex on wheels" which sounds much more enticing. Same for graphs and charts, simply giving a random occurrence of events on a chart a name such as "hammer, M, cup, or W" tricks the mind into seeing something that may not even exist. I interpret it as superstition.

 

[chickensevil]

I don't see a double top "M," instead I see a double dip "W" from f*r* incident to $260s then back to where we're at currently makes more sense. Businesses love to name their products as it brings better marketing, take for instance those whiskey shots you can buy from a bar, instead of calling it whiskey they'll call it something obscure like "sex on wheels" which sounds much more enticing. Same for graphs and charts, simply giving a random occurrence of events on a chart a name such as "hammer, M, cup, or W" tricks the mind into seeing something that may not even exist. I interpret it as superstition.

Fair enough about the superstition, which is why we here call most of the charting "unicorns". But in TA this is what I am referring to regarding the double top:
Double Top Definition | Investopedia

The key here is encompassed in this picture:

You will usually also see a very high red volume on the charting as well. In the case of TSLA, we have not been seeing that happen. So I was attempting to validate the line of thinking surrounding why it is not the double top.

You are correct in saying that it can be easy to see what you want to see in a chart to validate your opinion... and I am not saying it is impossible for us to fall through the floor, just that for a highly volatile stock like TSLA to not fall back after failing to break through it's high indicates that there is core support holding it up which is pretty bullish.

I also am taking it a bit farther with TA (since it usually doesn't care about the why, just the what) and adding in the why. Which is that everyone knows there is impending positive catalysts.

AIMc: I actually agree, we were all totally wrong on what the catalyst was for January, but at least we were right about the timing. I made off like a bandit from that event too! At the very least we all strongly suspected that *something* would happen at the show... which is the key I would focus on...

 

[pz1975]

Last time we reached ATHs, the stock hung around the high level from Feb. 26-March 6 (8 days) before starting its slide down. This time, it has hung around the high level for 10 days. What does this mean? I have no idea. Just figured I would share...maybe the "make it or break it" point as to whether we hold and move back up or drift down (TSLA never trades sideways for too long) is imminent.