Short-Term TSLA Price Movements - 2016

[geneclean55]

Yo-yo price action for the past hour. Not sure what that means to my untrained eye

Very distracting at work though !

 

[hershey101]

I sold some short-term plays here... We are following the NASDAQ up on low volume, and clearly overextended (in the short term). For those of you looking to play the Model 3 event, I suspect that we might get a better buying opportunity next week (low $220s), although the IV on short term options might not make it worth the wait. I expect us to have a sell-off if we are around $245-$250 area in 2 weeks, and maybe a slight tick up if we stay where we are right now. I won't be buying short-term calls into the Model 3 reveal (before Sept) unless we go back down to $200ish. I'm also looking to unload the single Sept play I have left and stick to '17s and start looking to buy some '18s if the right opportunity presents itself. Be careful playing monthlies on the Model 3 reveal. It might make sense to be an options writer next week if IV goes up to earnings levels

 

[Johan]

Did you mean buy the rumour, sell the news?

No. What you said is what may happen to a degree, so I'll do the opposite: sell (in to strength) before the reveal and then (assuming there's nothing wrong with Model 3) buy back (in to weakness) after (as the hoard are selling the news).

 

[ibcs]

Extremely distracting for the last week. Thankfully, I'm self employed.

 

[AudubonB]

I miss AudubonB....

Rumour is he's still around, somewhere. MY guess is the combination of the new forum format, yet One More Borealis Medical Fright (he's okay now), the selling of one Land Cruiser (YAY!) and the buying & tweaking of yet another (YAY!YAY!YAY!), has meant that the only "moderating" he's been able to accomplish has been to ensure fireworks have been kept to a minimum.

 

[Julian Cox]

Rumour is he's still around, somewhere. MY guess is the combination of the new forum format, yet One More Borealis Medical Fright (he's okay now), the selling of one Land Cruiser (YAY!) and the buying & tweaking of yet another (YAY!YAY!YAY!), has meant that the only "moderating" he's been able to accomplish has been to ensure fireworks have been kept to a minimum.

Boom, happy 4th July.

 

[ev-enthusiast]

Boom, happy 4th July.

Boom, welcome back

 

[Papafox]

I sold some short-term plays here... We are following the NASDAQ up on low volume, and clearly overextended (in the short term). For those of you looking to play the Model 3 event, I suspect that we might get a better buying opportunity next week (low $220s), although the IV on short term options might not make it worth the wait. I expect us to have a sell-off if we are around $245-$250 area in 2 weeks, and maybe a slight tick up if we stay where we are right now. I won't be buying short-term calls into the Model 3 reveal (before Sept) unless we go back down to $200ish. I'm also looking to unload the single Sept play I have left and stick to '17s and start looking to buy some '18s if the right opportunity presents itself. Be careful playing monthlies on the Model 3 reveal. It might make sense to be an options writer next week if IV goes up to earnings levels

Hershey, I can appreciate taking some gains after this nice runup. I'm still not convinced the run up is done, however. Today I've been selling June calls and buying similar Sept calls. My thought is that if we have a slump in stock price in the next few weeks, I have plenty of time to recover because the Septembers will allow Q2 ER results to be announced. If, on the other hand, the number of Model 3 reservations sends the stock flying, I will ride it up with the Septembers (just not as wildly as with the June calls). So, instead of taking profits I'm buying some insurance by extending out a few more months. This will allow me to take advantage of a spring or summer short squeeze.

 

[MitchJi]

I wrote the following summary of the current state of TSLA for some friends who wanted my 2 cents last week. My apologies for the length, and feel free to shoot holes in anything stated.

Model X
The Model X is over-engineered. It is simply more complicated than it needed to be.


Model 3
On March 31st, Tesla will unveil the Model 3. A deposit of $1,000 is required to place a reservation. One item of note: the federal government gives a $7,500 tax credit for purchasing an EV, but only to the first 200,000 vehicles made by the same manufacturer in the U.S. This is important because Tesla has already sold approximately 50,000 vehicles in the U.S. so far, and should sell another 50,000 by the time Model 3 becomes available. That means that only the first 100,000 U.S. reservation holders should expect the rebate. My prediction is that we will see a mad rush during the first few days to place a reservation. 1 million reservations in 2016 is not unachievable, in my opinion. That would be the equivalent of a $1 billion loan, interest-free.

Your over-engineered, comment implies it was a mistake. Maybe yes, or maybe not, but those claims are premature, like calling a 7 game playoff series based on the first game of the series.

Your estimate is low as previously pointed out, and it should include MS and MX sales for 2018 (as long as the subsidies are good they will apply to all vehicles sold).

 

[Julian Cox]

@jhm et al

TSLA seems to be behaving itself nicely so I wanted to just chip in a little something about the Model 3 line jumping for Employees and current Tesla owners that I trust would be useful.

IMO (and perhaps objectively) the two worst things that ever happened to Tesla post-Roadster was hesitancy of the very first Model S reservation holders to confirm delivery a bunch of scalpers in China reserving and then cancelling.

I would say that beyond all other considerations that Tesla is doing the sensible thing to de-risk the early Model 3 ramp by ensuring that its initial production is reserved by parties that it has established a relationship with and in the case of customers, folk that have a history of reserving their vehicle and seeing it all the way through the order process to delivery. Essentially some tens of thousands of reservations for delivery that are at extremely low risk of cancellation.

Just like the Model X and the Model S before it, the Model 3 will be launch at peak cash outlay for raw materials and components, equipment and staffing before the dawn of incoming revenues, but unlike the S and the X, the first Model 3s will be coming off a high performance mass production line whereby priming that line with solid production planning is going to be vital for a cascade of reasons from mission-critical cash management to the quality of the launch in the eyes of the supply chain, downstream customers and the investment community.

While I can see the application of the principle that new customer acquisition seems to be incrementally beneficial in contrast to repeat custom. What I would say about that is that the early ramp is not the occasion to be aggressive in terms of marketing but rather an occasion to optimize around operational risk management targeting solid execution. The very worst case scenario is a $billion launch leaning into a month plus panic to qualify reservation holders none of whom are ready to be the first to put their hand up before seeing someone else take delivery - which on the $100 million scale is essentially what happened with the Model S and must not be repeated. What we are seeing here is evidence of a smart management team that learns.

In all likelihood the clamor for this product will be overwhelming regardless and all the more so as a result of Tesla pulling off a flawless ramp. Solid customers to start out with is IMO a solid call on the part of Tesla's management.

 

[Papafox]

TSLA doing well after-hours: 227.6 right now. Anyone aware of news that might be behind this action?

Edit:
Now TSLA is above 228. Still looking for a cause behind the after hours runup

 

[jhm]

JHM, I tossed a flippant comment in your direction yesterday with little thought. I apologize for it. Your commentary is thoughtful, well articulated and while we may not always agree, I very much appreciate your perspective.

Thank you.

 

[Johan]

JHM, I tossed a flippant comment in your direction yesterday with little thought. I apologize for it. Your commentary is thoughtful, well articulated and while we may not always agree, I very much appreciate your perspective.

Thank you.

Get a room you guys.

Tomorrow could be a battle for the 200 day MA. BTW what days next week are closed for trading (due to Easter?)

 

[jhm]

My google brain directed me to this summary of carbon output for cars in the middle of advertising for American Forests, a non-profit conservation group. They estimate 8300 lbs of carbon per vehicle. If this is correct, moving to EV would only reduce global CO2 by 25%.
Not really a short term issue, but it shows how long the product cycle is going to be (hello mmd).

Warning, this post addresses stock price trend:
I was looking at a price chart for Dell from 1992-1995. It is a bit like TSLA, but with the long product cycle and larger market, Tesla could have a similar, but much longer rise than Dell. To follow Dell would have us run up to about 400 this year and then pull back to about 220-250, and then move to new highs in 2017 and fairly consistent trend until about 2022. This being a different market with longer product cycles, if Tesla continues to transform their markets (energy and cars), the stock run could last well past 2025.

Thanks. Your source used 17.68 lbs per gallon of gas. I think I can like that back to oil displacement and avoid the problem of having to guess miles per year or mpg. It will sync up nicely with the oil crash scenarios.

Let's continue this in the Shorting Oil thread.

 

[Julian Cox]

TSLA doing well after-hours: 227.6 right now. Anyone aware of news that might be behind this action?

I think more to the point, why would it not be this way? Except for trepidation owning to the fact that recently the price went down there is no reason for the price not to go up. The stock is ridiculously oversold with nothing whatsoever sustaining the short thesis - the shorts have no cogent idea at present to explain why they are short. May as well call this an ongoing correction.

As Johan alluded to earlier (something that I have been at pains to point out too) - the next item of interest IMO is a maybe / maybe not sell on the news following the Model 3 unveil. At this point, on balance I am starting to lean towards the idea that the market is still not close to pricing in the profundity of the Model 3. In other words a critical mass of the market is not expecting anything like it which means there is upside surprise left on table.

Right now my best guess for playing the unveil may well be to either play it long from a pre-announcement bear-attack/profit-taking dip or if one is extremely quick on the draw to seek a manipulation dip in the first minutes of trading after the unveil before the thing goes skywards.

 

[Johan]

if one is extremely quick on the draw to seek a manipulation dip in the first minutes of trading after the unveil before the thing goes skywards.

We've seen this attemped after a few of the legendary quarterly reports in 2014 & 2015, early pre-market and market trades heavy on the sell side that depresses the stock price early on. This costs these sellers money, what is attempted to gain from the money spent is:
1. A lower price from which to start getting out of short positions
2. Technical and agnostic traders look for the market reaction (price action) to interpret news for them: to them a lower price early in the trading session following big news means the news were negative for stock price. Value/fundamental investors are also more influenced by this phenomenon than we are able to see ourselves, but that's why this forum is so important to me; I'm able to keep my eyes on the price (the fundamental long story of TSLA) and not be distracted by market moves and the collected wisdom here allows me to interpret news about Tesla better than many, so that I can correctly integrate the new information in my long term price target/valuation of TSLA.

 

[c041v]

I bought a small position for trading at 183 on Mar 2 but sold at 202. Should have held it. Core is doing great though. Only regret is not buying more at 150.

After sitting on the sidelines for too long, I doubled my (albeit small) stock position at $150.47. One of the best timed trades I've ever made. Now I find myself wondering how to play the Model 3 release.

That said, Curt and Julian's comments confirm my suspicions that masses and media still don't understand the magnitude of Model 3. I'll going on record now saying that I'd be a fool to sell a single share anytime soon...

 

[geneclean55]

TSLA doing well after-hours: 227.6 right now. Anyone aware of news that might be behind this action?

Edit:
Now TSLA is above 228. Still looking for a cause behind the after hours runup

I don't really follow after-hours activity. Is TSLA usually flat after hours on other days?

 

[Johan]

I don't really follow after-hours activity. Is TSLA usually flat after hours on other days?

No. What Papacox thought he saw was just a blip. I didn't look at the start of AH live though so maybe there was some suggestion of a trend starting? But looking now there was relatively low volume (as of now only 70k shares traded AH).

 

[tinm]

Meanwhile, former Tesla spokesperson Ricardo Reyes gets stung by a stingray and winds up in the hospital.

To what degree this will affect the short term TSLA stock price is still open to debate.

ricardo reyes (@ricardor) | Twitter
https://twitter.com/ricardor
(including an Instagram photo of his stung foot)