Short-Term TSLA Price Movements - 2016

[Tenable]

Only advice, please make your own decisions and don't hold this against me: I'd sell the April calls before March 31. I'd keep tge put positions (you sold puts right?) open as well as keep the 2018 calls.

Perhaps better next time to take it in a PM?

A PM is likely a wiser choice, will do. A big thanks to everyone for their .02, the end decision and result is always on me. If I make the wrong call, I'll never hold it against those trying to help.

Thank you again

 

[FredTMC]

It is tempting to correlate price action with short action. But often times things don't work that way.

I'm looking at MarkIt data which I believe collects short information through partnerships with brokerages and it publishes out overnight for day before. As per them short-interest has been gradually going up through this price up-trend. Right now (reflecting yesterday) it stands at an all-time high - about 0.5mln more shares short than the latest exchange reported data.

Interesting. I'm fine if new shorts pile in and short interest is actually increasing. When the squeeze comes it'll be that much more dramatic.

 

[FredTMC]

If they deliver 3000X, 16,000 total is within reach. The Model S delivery tracker is showing a fairly tight sample from VIN 120,000 to VIN 133,000. The delivery push in Q4-2015 seems to have tightened up the bell curve. If they don't hit 3000X, it seems unlikely they will hit the 16,000 guidance. This is likely the hardest quarter to hit numbers, with X likely on track for 6000 to 8000 in Q2. Noteworthy in the Model S delivery tracking is the faster delivery times in the midwest and east. It seems they are doing more truck shipments, or rail to the midwest and moving to truck before getting stuck in the Chicago bottleneck for 3 weeks. I'm guessing they looked at the inventory data and assume it's better to take a hit on shipping costs rather than holding more inventory or missing delivery numbers.
Hitting 16,000 puts all the highlight on the Model 3 and Tesla Energy sales growth. If orders are high, it reduces risk of future earnings until at least 2018, which could have a significant impact on the stock price the first week of April.

Thanks. My view is that it's most important to hit their delivery guidance for the quarter (Q1). It's far less important for wall-street what the mix is between MX and MS.

Last quarter few people thought they'd hit their guidance. I did.
Honestly, I can't see Tesla missing guidance this quarter either. Why? They can produce MS faster than ever and MS is the vast majority of deliveries.

I think tesla is more careful now than ever about hitting guidance. It general, it's never desirable to miss your guidance (especially if you're a growth stock)

 

[jhm]

I wish we had a couple more bears in here.

Well, let me speak as an oil bear. Indeed, I initiated a short position yesterday on oil. Feel free to shoot spit wads at me for being a short.

So the recent leg up from $27/b to $41 may be peatering out. And Tesla has been enjoying this free ride too. This run in oil is based on hope, hope that OPEC - Iran + Russia can agree to a production freeze when they meet on April 17. Sounds like a reason to bid up oil 50%, right. So we could see a new leg down starting today.

But that would not be the worst scenario. An alternative is that oil groups and believes their way upto $50/b. The market goes nuts. TSLA shares soars, launching into visions of greater granduer. Then April 17 comes and goes. The oil market is confronted again with the reality that uncle OPEC can't make things better. The glut is expected to persist on out to 2018. Oil falls hard. And TSLA circles around the toilet with it.

So there you have it. Get protection. Short oil.

 

[Ukland Wombat]

Actually I think they absolutely need to raise capital latest next year in order to build GF2 and another Fremont level factory to expand beyond 500k per year in time. May not be a huge raise because they should be able to attract a lot more partners to chip in if they demonstrate strong demand of the 3. I just think they might keep their words this time and wait till next year, even if it means Jan 2 2017.

If we get an all time high before May ER, nobody will complain about a capital raise especially under the pretext of a greatly accelerated capacity build out.

 

[AlMc]

I wish we had a couple more bears in here. Feel free to respond as harshly to this question as you would like as that's what I'm looking for.

Why would the stock move down from here prior to some sort of announced trouble during the ER? I'm by no means a seasoned investor. I do however have a large position (for me) of 800 shares all of which are in the green. Many experienced voices seem to be taking money to the sidelines.. I don't see any clear reason to expect anything but upside in the near term.. am I missing something?

I can only speak for myself but iJohan and Citizen may have a similar view and they can chime in if they like.
Long term stock holders, like yourself, have little reason to sell if you believe in the long term prospects of TM/TSLA.
Shorter term momentum can change quickly and taking profit is rarely a bad thing. Sure, you may risk missing out on more profit. I am trying to be as disciplined as possible with my trading dollars.

 

[Ukland Wombat]

If we get an all time high before May ER, nobody will complain about a capital raise especially under the pretext of a greatly accelerated capacity build out.

I meant to say " under the pretext of a much greater capacity build out"

 

[LargeHamCollider]

It is tempting to correlate price action with short action. But often times things don't work that way.

I'm looking at MarkIt data which I believe collects short information through partnerships with brokerages and it publishes out overnight for day before. As per them short-interest has been gradually going up through this price up-trend. Right now (reflecting yesterday) it stands at an all-time high - about 0.5mln more shares short than the latest exchange reported data.

Sounds like good news to me, like Fred I was guessing that recent price action was due in part to short covering.

 

[Curt Renz]

Well, let me speak as an oil bear. Indeed, I initiated a short position yesterday on oil. Feel free to shoot spit wads at me for being a short.

In the long run the price of boatloads of oil may fall to that of buggy whip factories. Of course anything is possible in the short run, and your analysis is appreciated. Good luck with your position. Meanwhile, here is a short Bloomberg video about how the eventual dominance of electric cars should greatly reduce the demand and price for oil.

 

[chickensevil]

I can only speak for myself but iJohan and Citizen may have a similar view and they can chime in if they like.
Long term stock holders, like yourself, have little reason to sell if you believe in the long term prospects of TM/TSLA.
Shorter term momentum can change quickly and taking profit is rarely a bad thing. Sure, you may risk missing out on more profit. I am trying to be as disciplined as possible with my trading dollars.

Correct, I think you and I are on around the same timing structure for when we started getting into Options on TSLA, and have bother suffered some really hard burns and difficult learning opportunities over the span of the last 2 years (man, trading options on the last 2 years... did I pick the wrong time to start trying to figure this out with the stock price having just not gone in the directions that I had wanted it to when I wanted it to...)

So I personally have been doing everything I can to be less emotional and calculated with the trading. So in response to Tenable, it isn't that I think that the Model 3 will be received well. I actually feel really great about the product reveal. But you have to ask yourself, what is going to cause the market to rise?

Stocks go up on speculation of future (or I suppose current) returns. And they die on the failure to carry through with those. This product reveal, while critical to the future of Tesla won't be felt to the company's bottom line in a positive way until the end of 2017. Most Wall-Street investments float quarter to quarter and at best you can get a one year outlook. Anything beyond and it is really tough to put value in something today that will happen in the future.

And then look at what happened with the Model X event. That is *the* definition of a product release right there and something that would be happening in a short term. Where did the stock price go after that event? (for those interested that was Sept 29th) Down... Yet it was a fantastic product release, all the customers seemed largely happy with what they saw, and we got a number of people willing to convert their orders over immediately. By every rights, that was a positive event yet the stock dropped.

Take the D event, again, amazing event, wonderful two new features that noone really was anticipating... I mean, I guess they were somewhat... but Mr. Market for sure was not expecting what was released. Where did the price go? from around 255 down to 227 in the following 2 weeks.

By all accounts, the Model 3 is likely to blow people away. 35k for this? It's going to be fantastic! But the question isn't how you feel about the car, or how the general customer base feels about the car... But rather what is going to move the stock? There is only 1 thing that *might* stand a hope of moving the needle in our favor, and that is that Tesla either tells us reservation numbers or we can figure them out (like we could figure them out with the X) and through that we get some really high numbers out of the deal. None of that is likely to be *on* the 31st...

What might also move the stock positively is delivery numbers. This could go well for us and there be a really great breakout of MS vs MX sales, and if they post some 3k MX numbers AND continue to hold strong MS numbers then sure that could move the needle. How confident are you that the positives from the delivery numbers will be enough to counter the "Sell the news" from the M3 that is likely to happen given historical reference above?

Finally we could get some positive momentum from the MX ramp itself. But I am afraid that this won't truly be felt until we get to the Q1 ER which is in May. So that positive swing will likely be whatever moves us up out of the bottom trending for whatever happens after the M3 reveal event.

Hey, maybe I am wrong here, maybe we get an explosion after the 31st. It could certainly happen. But I am just being cautious given historical trending over how the market has taken these sort of things. The market cares about 1 thing and 1 thing only, and that is the bottom line (just wait for them to start actually posting some kind of profits again and those FCF numbers and see what happens to the stock price!), a 1k refundable deposit isn't directly influencing that bottom line for another 2 - 2.5 years... So why would the market care when there is a lot of negative spending Tesla is going to have to make between now and then to make this happen. And given Tesla is not prone to executing on things quickly, if I were a bear I would expect them to miss the 2017 delivery mark and expect it to fall to 2018, maybe later, and oh by the way, they are just going to keep spending themselves into a hole that they can never get out of. This is the negativity around Tesla right now. And you aren't going to see amazing price action until Tesla can prove them wrong. That is not happening on the 31st... I'm sorry, but it just isn't.

If you are holding core stock, just continue to hold. Nothing to worry about right now. If you are speculating and trading momentums, then it is time to start looking at taking some money off the table to lock in those profits that you should have made as we went from 140 - 230.

 

[The Blue Owl]

I sold all my short-term options (April 1, April 8, and June) which were deeply in the green and deployed around half of the profits into higher strikes for April 8 and June. I replaced April 230 calls with April 8 270 calls, and June 260/280 calls with June 320 calls. If we do get a run-up after the revealing of the Model 3 and the Q1 numbers, the higher strikes will return approximately the same amount as the more conservative ones I liquidated. If we drop, I know I locked in half the winnings.

Just thought I'd put this out there for those who are in a similar situation and wonder what to do. The consensus seems to be that taking some profits off the table may be a good idea, and I agree. But I'm also greedy, so by taking more risk (but with half the funds), I still have a chance to get the whole cake back.

I use http://www.optionsprofitcalculator.com/calculator/long-call.html to explore these scenarios.

 

[SW2Fiddler]

You may notice that the whole southern route through Texas is devoid of superchargers. Somehow I don't think that's an accident.

Very little trouble to drive among all of Texas' big cities, due to the Superchargers Tesla built years ago.
That whole southern route may just as well be punishment for New Mexico's politics and policies, vs. Texas'.

I suspect you are just blowing a 'dog whistle' as you still have not connected ANY of that to why TM employees would be saying they wouldn't be reserving a 3.
Goodbye.

 

[Julian Cox]

I did not expect the "D" or the Model X "launch" events to spike TSLA and going back further in history I actually called a price drop on the battery swap unveil - but my gut is yelling at me that there is over-caution around here regards price action surrounding the Model 3 launch.

Anyone got a good handle on deliveries - because if that is a beat that will be announced to coincide with recommencement of trading after the unveil too in addition to a media frenzy about lines around the block for M3 reservations.

I think the market will play an April fools prank on the sage and the sober that are banking on a sell on the news to the point of feeling like calling it. This stock is heavily oversold by a contingent begging the stars for flubbed unveil - and then out rolls the aluminum bodied beaut with insane cabin tech and performance stats. This ain't going to be a pretty sight for the shorts.

 

[Tenable]

Very little trouble to drive among all of Texas' big cities, due to the Superchargers Tesla built years ago.
That whole southern route may just as well be punishment for New Mexico's politics and policies, vs. Texas'.

I suspect you are just blowing a 'dog whistle' as you still have not connected ANY of that to why TM employees would be saying they wouldn't be reserving a 3.
Goodbye.

Not that it should matter, but Tesla has also opened at least one new Texas supercharger in recent months. Perhaps two, but I dont feel like looking through my emails to confirm dates.

 

[chickensevil]

I did not expect the "D" or the Model X "launch" events to spike TSLA and going back further in history I actually called a price drop on the battery swap unveil - but my gut is yelling at me that there is over-caution around here regards price action surrounding the Model 3 launch.

Anyone got a good handle on deliveries - because if that is a beat that will be announced to coincide with recommencement of trading after the unveil too in addition to a media frenzy about lines around the block for M3 reservations.

I think the market will play an April fools prank on the sage and the sober that are banking on a sell on the news to the point of feeling like calling it. This stock is heavily oversold by a contingent begging the stars for flubbed unveil - and then out rolls the aluminum bodied beaut with insane cabin tech and performance stats. This ain't going to be a pretty sight for the shorts.

I mean, I say I will be cool and collected and sit on cash through the event, but I will likely cave and do *something* on the crazy out there speculation side as a sorta lotto ticket, it will just depend on option pricing as we actually get to the event date. But any speculations on the positive side for me will be what is an insignificant amount of cash. I am not giving back the 100% portfolio return I am sitting on right now from the run from 140-230. Doubling my entire holdings is a really great feeling and one I would not like to make the mistake of giving back.

Edit: that doubling *includes* all of the shares I own in that number along with the options returns I have made.

 

[mejojo]

Very little trouble to drive among all of Texas' big cities, due to the Superchargers Tesla built years ago.
That whole southern route may just as well be punishment for New Mexico's politics and policies, vs. Texas'.

I suspect you are just blowing a 'dog whistle' as you still have not connected ANY of that to why TM employees would be saying they wouldn't be reserving a 3.
Goodbye.

Mod note: the body of this post was removed for snarkiness. It would have been relocated to the Snippiness purgatory, but the new forum platform precludes such actions at the present.

 

[Thumper]

Is this after hours trading odd? The drop after hours seems unusually large and coincidentally puts us back at the beginning of the day.

 

[Curt Renz]

Is this after hours trading odd? The drop after hours seems unusually large and coincidentally puts us back at the beginning of the day.

I see it up during after hours with no significant drops between the closing and now.

 

[SBenson]

I did not expect the "D" or the Model X "launch" events to spike TSLA and going back further in history I actually called a price drop on the battery swap unveil - but my gut is yelling at me that there is over-caution around here regards price action surrounding the Model 3 launch.

Anyone got a good handle on deliveries - because if that is a beat that will be announced to coincide with recommencement of trading after the unveil too in addition to a media frenzy about lines around the block for M3 reservations.

I think the market will play an April fools prank on the sage and the sober that are banking on a sell on the news to the point of feeling like calling it. This stock is heavily oversold by a contingent begging the stars for flubbed unveil - and then out rolls the aluminum bodied beaut with insane cabin tech and performance stats. This ain't going to be a pretty sight for the shorts.

Julian, I agree with this. I usually am guarded against echo-chamber type participation. So I was quite hesitant to post this but will do anyway.

I watched pretty much every Musk video that was ever posted on youtube. If you watched enough of his feature length interviews, you will observe this as well.

With regards to SpaceX, Musk has always said the "holy grail" was re-usable rockets and he had his eyes dead set on that target. For Tesla, per Musk, the "holy grail" is Model 3. The phrase 'holy grail' is his, not mine.

This launch is very different from that of any of the prior unveils or events. This is a fundamental shift in course of humanity. This is the moment when a rocket comes back from the sky and does a perfect landing - but in a Tesla sense.

In one of the annual shareholder meetings, someone asked what will cause EVs to be adopted by main stream. Musk's answer was "long distance travel and price - and that's it" and he did a hand movement drawing a hockey stick in air - projecting how market will take off once these two are accomplished. Long distance travel is one thing that Tesla already accomplished (note: which no one else did, yet). The only thing left was price. This unveil represents accomplishing the goal, or confidence in accomplishing that goal, with today's available battery tech, with "no miracles needed".

If Musk's vision is to be believed - this is THE holy grail. This is a very big deal.

 

[mmd]

I wish we had a couple more bears in here. Feel free to respond as harshly to this question as you would like as that's what I'm looking for.

Why would the stock move down from here prior to some sort of announced trouble during the ER? I'm by no means a seasoned investor. I do however have a large position (for me) of 800 shares all of which are in the green. Many experienced voices seem to be taking money to the sidelines.. I don't see any clear reason to expect anything but upside in the near term.. am I missing something?

I can think of few potential concerns before the May ER:
1. Model 3 does not turn out to be great, or reservation numbers are not announced (meaning, not great).
2. Q1 delivery miss.
3. Low Model X delivery numbers : I think, Model X is now already seeing demand slow down significantly. Some reported new CA orders produced within days. Take a look at this Founder series MX on ebay. Highest bid only $101K.
Tesla: Model X P90D FOUNDERS EDITION
4. Investors taking profits, selling out the news of Model 3 launch.
5. Media focus turned back on negative news from positive euphoria over Model 3.
6. And of course, the macro sentiment going negative. It's not just Tesla. Whole market has come back swinging in the last few weeks.