Short-Term TSLA Price Movements - 2016

[jesselivenomore]

It doesn't look very good there where TSLA crossed to cloud (up) in early January 2016, fell like a rock straight after that. Explain again why it's a bullish sign when the stock price intersects the Ichimoku cloud?

This probably belongs in the technical analysis thread, but does relate to short term movement.

Back in late Dec that was a major false breakout not only for Ichimoku clouds but also with 200 SMA/EMA and most other technical indicators. At the time I was posting here that a break of those levels on heavy volume(5M shares was my criteria) would indicate a major breakout. We never got that volume confirmation when we broke above 240. In fact if you remember, the reason why we went above 240 those last two days was due to speculation from Trip Chowdhry of a beat of Q4 delivery numbers, which later turned out to be false. The momentum buyers from that speculation and their subsequent exodus was the recipe of the false breakout. This was also one of the primary reasons I sold the majority of my position around 220.

So as those who use technicals know, they are merely tools that need to be interpreted - volume confirmation being one of the criteria needed. With that said, ichimoku clouds are pretty good indicators overall. Some past cloud breaks from TSLA:

With that said it is important to note that we currently have NOT yet broken above the cloud(213), and it is indeed one of the reasons why I am not adding to my position until 220.

 

[LargeHamCollider]

Some afternoon entertainment.

:Avoid Tesla Because Hydrogen Is The New Electric - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

 

[BornToFly]

As happy as I am about what the recent climb has done for my portfolio, the best part about all this is how it seems to have gotten ridden of all the trolls. Reminds me of what happens with cockroaches when you turn on the light....

 

[Hogfighter]

You know, one thing that concerns me is the lack of differentiation in the future Tesla product lineup. Why exactly would someone buy the model S? Assuming the 3 has similar range, seats 5, is as nice looking, has AP features... In the end the S is larger and can have jumper seats... If they do make the 3 as well featured as everyone is speculating, I hope they do a model S refresh to push it up the value chain. Highest range, more luxurious interior, updated styling etc.

The cool thing about having the X in the pipeline is that it reduces the risk of the 3 taking market share from the S. They can refresh the S while pumping out X's, and leapfrog each refresh.

 

[jhm]

FWIW, over the last 30 days oil has climbed from below $30/b to $38 today. The RBOB price for gasoline has also climbed from below $1.15/gal to over $1.39.

While I do not believe this has any specific impact on Tesla or the marketability of its products, it does reduce a lot of stock market anxiety for the stock price.

Rig counts in the US continue to decline, but the oil inventory continues to build. So long as it is economical to store surplus oil for future consumption, prices in the high $30s, even low $40s can persist. But the longterm view of the future market is that the price stays under $50 for the next 9 years. So the price really cannot get too close to this long-term price until production falls to meet consumption. Boring prices in range of $30 to $40 for several years could be just fine for everyone but oil producers.

 

[Zhelko Dimic]

With that said it is important to note that we currently have NOT yet broken above the cloud(213), and it is indeed one of the reasons why I am not adding to my position until 220.

Jesse, thanks a lot for your contribution here, I find it super useful.

On the subject of cloud, see how SP tried penetrating cloud today, and then it parked itself directly against it

Though still scared silly after that drop to $140, I'm quite positive rally will continue. Major indices have all gone through clouds cleanly, and I've seen couple other stocks I follow go through cloud, for example MBLY which has similar profile

MBLY

SPY

 

[The Blue Owl]

To take the discussion further, an analogy here is how fractional reserve banking expands the money supply with lending.

Hey, you stole my analogy

 

[doctoxics]

Thanks to all who have analyzed the recent TSLA stock price trends in this thread. I continue to learn from your collective wisdom. Perhaps you have already commented on this one observation that seems to be a regular pattern. The recent buying seems so measured. Except for that one day short-seller comment, we seem to be going up at a constant rate. Following the trading more closely, it appears that the buying comes in at the dips and levels off at the peaks. Very rational. Very measured. No emotional overshoots either direction. Could this be institutional shorts covering their short positions prior to the Model 3 reveal?

If I put myself in the place of a short (I am long TSLA), I would be concerned about the Model 3 reveal. If the specs for the Model 3 indicate that it is superior to any ICE car in its class (and will forever be so), then the TSLA stock price could explode, based just on the size of the potential market for the Model 3. With this concern, if I were a short, I would be buying TSLA to cover my short position. So as to not push up the stock price too high too fast, I would be buying TSLA (along with other shorts) at the steady rate we appear to be seeing. This is not a squeeze. This is a rational covering of a short position preceding a major event.

Again as a short, I would reevaluate my TSLA investment after the reveal. If the Model 3 appears to be a better car than any other in its class, as a short, I may well then go long TSLA. The upshot of my speculation is a steady increase leading up to the week of the reveal, and then the real possibility of a dramatic climb in the stock price. This, of course, would squeeze any shorts who haven't covered, although, I wonder with all of the buying that we are seeing, how many will be left at the time of the reveal. We are probably all expecting a one day sell-off after the reveal due to short-term traders taking advantage of the current run-up. But then the fireworks begin. I hope.

 

[ggr]

No worries. I'm just glad to see the issue get hashed out. I do think it helps us undestand how shorts are able to dilute the shareholder base and what happens when when the supply of long position shrinks when short interest declines.

To take the discussion further, an analogy here is how fractional reserve banking expands the money supply with lending. It does no increase the supply of physical gold (to go back to the early days of banking), but it does increase the claims on gold circulating in the economy, i.e. money supply. Fractional reserve banking can get into trouble when to many depositors demand there deposit, and in the extreme this is a bank run. So brokerage houses can also get into trouble when too many shareholders need their shares, but these have been lent out to shorts. This is why brokerages need to charge high fees for borrowing shares when they are hard to borrow. The broker is risking having to buy shares on the open market to satify obligations to clients who have in effect deposited shares with them. The broker needs to charge a high enough rate to mitigate this risk, or at least to be properly compensated for bearing the risk. If you sell in the midst of a short squeeze, and you broker has lent out your share, your broker may well be obligated to buy on the market the shares needed to execute your transaction. This is like a banker who has lent out you deposit of gold. If there is not enough gold in the bank's reserve, the bank is obligated to obtain gold from another holder of gold potentially at great cost. If the bank cannot do this, a run on the bank can ruin the bank. Brokers will push as much of this risk onto shorts as possible through fees and margin calls. Either way, a true short squeeze is a crisis event precipitated through the extension of credit. The only way to dial back in the extention of credit to pay prices high enough to persuade longs to surrender their claims to shares. There are more claims to shares than there are actual shares, so some longs will have to be bought off with cash very quickly. This is why the price can jump to unsustainable heights as the supply of shares rapidly shrinks back toward the shares outstanding. This is my understanding of a short squeeze.

One extra point to add to this explanation: some of the outstanding shares belong to people who just don't trade them generally, in this case the big institutional investors and Elon and other insiders. Only about 25-30% of TSLA "real" stock is actually available to be sold on a normal trading day. But when the short sellers are in abundance, it is possible that there are more shares loaned out than there are shares available to be bought. This is when a real short squeeze can hit. Holder A sells his shares, his broker has to buy on the open market, so Holder B sells to him, then B's broker has to buy, ...

Add to this that the actual short sellers are now getting panicky and want to buy to cover.

 

[Stretch2727]

Continuing the short discussions.

-Don't the shorts get squeezed due to margin calls? Don't they have to keep a certain amount of cash in their account to cover buying the shares so they cannot hold on indefinitly if the shares continue to rise?

-How do the additional dividends (ok not Tesla) get paid for a the case where 2 long shares have been created by the 1 short transaction? (still have trouble understanding how there really could be additional shares out standing). What about shareholder votes etc. Both the longs think they own the same shares?

 

[geneclean55]

Regarding possible short squeeze, some people are suggesting that the re-bound to date may be largely due to less fretting over macro events. If so, it has to be especially terrifying for shorts that an incredibly big news event is on the horizon for Tesla. Couldn't this accelerate any squeeze compared to a general market rally that Tesla is part of?

 

[larmor]

Market is looking for shock and awe. But as deliveries go out, in comes profit on MX, neither a shock or awe, unless you have never heard of a spreadsheet. Similarly for battery improvement, we knew this. Same for powerwall. Same for M3, we were told it will be competitive with 3 series bmw, so why wouldn't a 3 series buyer look at it or an accord buyer, no macro event coming, just plugging away...

Regarding possible short squeeze, some people are suggesting that the re-bound to date may be largely due to less fretting over macro events. If so, it has to be especially terrifying for shorts that an incredibly big news event is on the horizon for Tesla. Couldn't this accelerate any squeeze compared to a general market rally that Tesla is part of?

 

[anon]

More Model X VINs issued - now up to 23xx.

http://www.teslamotorsclub.com/show...being-issued?p=1404053&viewfull=1#post1404053

 

[uselesslogin]

So the in the X forums it sounds like California X reservation holders that haven't confirmed are getting called and told production slots are open for an end of March delivery if they confirm now. It sounds like Tesla is going to try to deliver as many X as possible March. It also looks like VINs are in the 2200 range so deliveries might be better than I thought.

 

[Bgarret]

So the in the X forums it sounds like California X reservation holders that haven't confirmed are getting called and told production slots are open for an end of March delivery if they confirm now. It sounds like Tesla is going to try to deliver as many X as possible March. It also looks like VINs are in the 2200 range so deliveries might be better than I thought.

Another thing to consider with all the California Model X deliveries is the ZEV credits. In addition to "loaded" Model Xs, Tesla may be getting ZEV credits for additional profit for every California X sale....think Volkswagon may be in the market for some ZEV credits? Interesting if their potential settlement spiked the ZEV market. It would be a nice symmetry if Tesla swept to profit in Q1 of 2016 on ZEV credits as they were also swept to profit in Q1 of 2013 on ZEV credits.

 

[BobSk]

Model 3 is an amazing car. This information has been leaked a while back. The first day's in-store reservation is going to be a large number. Then the first few minutes' online reservation on April 1st will be crazy. After Elon announces several years' Model 3s have been sold out, many people will regret they didn't act quickly. I can not think of any event like this in history. I heard several people and online survey predicted 50k~80k reservation. I think the initial number will be way larger than that, later it will pass one million. This is the beginning of the end of ICE. We are witnessing history in the making. I just keep my approach: adding TSLA with trading profit (from other stocks and indexes). Because my view is TSLA will rise to thousands, I don't have problem adding at any price. Pullbacks and breakouts are great, special thanks to shorts.

 

[BornToFly]

Well, they just pushed out over 2,000 more VINs on the X. I just got number 47XX. Utah Delivery.

 

[Cattledog]

Well, they just pushed out over 2,000 more VINs on the X. I just got number 47XX. Utah Delivery.

Now we're cooking with an electric induction range!!!

 

[sub]

Well, they just pushed out over 2,000 more VINs on the X. I just got number 47XX. Utah Delivery.

Impossible, how did Tesla go from an unbuildable model X just weeks ago to now pushing out all these vins? Apparently Tesla wasn't listening to all the trolls in this thread. :wink:

 

[CyberDutchie]

I want to ask here what people predict the price action will be after March 31 if Tesla ends up showing renderings and releasing specs of the Model 3 and not an actual prototype.

Reason I'm thinking about this is that I went by the Tesla store at Stanford Mall today to ask about the reservation process, and the answer I got was a little worrisome in my mind. The sales rep said the first reservations would be taken at opening time, which is 10am at this location. When I asked about whether there would be a live broadcast of the unveiling, the rep said he doesn't know yet. He said it could be that they just release the information about Model 3 and not show a prototype. He also said the online reservations could follow the next day, or, a week later, he doesn't know yet. And when I asked will there be people camping out in front of the store, he said "I hope not, we don't want to have Apple like situations". Hmm, what's going on with this guy... is he trying to lower expectations, or he is just not sure what to say. Anyone else received a similar message at a store when asking for details?