Short-Term TSLA Price Movements - 2016

[Julian Cox]

Courage?

Investing is not a knife fight. It is not marching soldiers onto the battlefield.

I having never relied on courage in my 20+ years of trading. I have always relied on intellect.



Yes I am unsure about recessionary fears. I have been lighten my long exposure since 220s and now hold less than 10% of my original position. If I am wrong and the risks abate, I would happily pay a premium to current prices and buy everything back at 220+, even 230+. Losing out on a 10% gain is no big deal to me when I believe TSLA is eventually going to $1000+. It's chump change.

On the other hand, what if you are wrong? What happens to the person that listens to you and over-leverages themselves at current prices? What do you think happens to TSLA if the general market falls another 20% from here? Best case, they run out of powder and are unable to act when the real buying opportunity comes. Worst case, depending on how leveraged they are, someone could go broke and watch TSLA go to $1000 in the coming years.

Pick one? I will pick the hard lessons I've learned over the past 20+ years that has allowed me to do this for a living.

Seeing as we are on the subject of Tesla I feel it is appropriate to point out that the defining feature of Elon Musk's $billiuonaireness is not the brains to know the right answer, it's the courage to do it while deliberately overriding irrational fear.

The right answer here is not a mystery. Sell you lose, hold you win. When? Sell you lose now. Hold you win later (unless you spook later).

EDIT: I obviously have no insight into people's individual leverage or lack of it and it is not my place (or yours I think) to caution people about leverage in general and especially in connection with any volatile stock. In case anyone is still curious - putting yourself at risk of owing a broker money as a result of short-term volatility when the object is to make some money is not a very good idea in connection with volatile stocks. TSLA is the best stock in the world if you worst case scenario is an annoying wait to be proven right.

Back on subject: If it is not helpful to point out where the ticker is going and on what date and why then I don't know what is.

 

[FluxCap]

Seeing as we are on the subject of Tesla I feel it is appropriate to point out that the defining feature of Elon Musk's $billiuonaireness is not the brains to know the right answer, it's the courage to do it while deliberately overriding irrational fear.

The right answer here is not a mystery. Sell you lose, hold you win. When? Sell you lose now. Hold you win later (unless you spook later).

Julian, I respect you, but could you perchance take your very valid and eloquent views on the long-term outlook for Tesla Motors to the Long-Term thread? You are a prolific writer but it becomes hard to see the discussion of short-term news and movements amidst the essays. You have made it clear you are in Tesla for the long haul as an investor which is great, but I would hope that you would not begrudge those of us who trade (some of us for a living) having a thread to call our own here.

Moderator topic framework for Long-term (investors) thread:

Some people in the market are traders, and others are investors. The difference? Time horizon.

Please use this thread to discuss the long-term fundamentals of Tesla Motors, from the POV of an investor.

Moderator topic framework for Short-term price movements (trading) thread:

...because even as I type this it's already a new year on the other side of the Date Line....Let the cogitating begin.

And a thank you to all participants from the moderators for the end-of-year pleas by some active participants for all in 2016 to offer considered, timely, and not overly duplicative posts; ones that are based on the best ideas each poster has in response to the signals of the market, the apposite news, trends, developments and breakthroughs coming in from without the market; and ones that take a respective tone to the input of others.

Happy New Year, everyone.

 

[MitchJi]

Here is initial indication of the shenanigans due to abnormally high open interest of $200 puts and calls expiring today. On a first glance it seems that TSLA follows NASDAQ, but closer look reveals that each individual candle in TSLA exadurated a bit in a way that ties it to $200. I think that TSLA will gravitate to $200 today. It might be getting looser from following market next week. Just a gut feeling.View attachment 108025

Kicking myself for not buying some $200 puts yesterday when TSLA was at $209. If you see something similar in the future please post it.

Thanks!

 

[jesselivenomore]

Julian, I respect you, but could you perchance take your very valid and eloquent views on the long-term outlook for Tesla Motors to the Long-Term thread? You are a prolific writer but it becomes hard to see the discussion of short-term news and movements amidst the essays. You have made it clear you are in Tesla for the long haul as an investor which is great, but I would hope that you would not begrudge those of us who trade (some of us for a living) having a thread to call our own here.

Moderator topic framework for Long-term (investors) thread:


Moderator topic framework for Short-term price movements (trading) thread:

Ironically, it is actually from a long term investor's point of view that I am expressing caution. Not for Tesla's business, that is all fine. But for the general markets. For a long term investor I do not want to get over leveraged at the very beginning of a market downturn, if indeed that is what is happening right now. Again, maybe, maybe not.

From a short term perspective, the markets are currently very oversold and are trading as if they are about to crash, which in most cases mean we will actually bounce. And in the rare cases, we actually do crash.

 

[aznt1217]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

 

[FredTMC]

It's coincidental and interesting that the $200 level for TSLA is approximately the same level for S&P500 key support level (1867)

its kinda nice nice in a way. Usually never works in our favor like this

 

[colettimj]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

"Its massive factory at Fremont is about to be reconfigured to boost production further."
Is this a reference to re-configuring the existing Line 1 for Model 3 or is there something else going on?

 

[FredTMC]

"Its massive factory at Fremont is about to be reconfigured to boost production further."
Is this a reference to re-configuring the existing Line 1 for Model 3 or is there something else going on?

v interesting. Could mean that the existing old MS body weld line will be decommissioned. My understanding is that space will eventually be used for model three production

This was the plan from this year. not sure if plans have changed.

 

[CHGolferJim]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

Thanks for that. First article I've seen without errors, at least that I noticed. Exciting photos.

 

[Julian Cox]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

"It would be obvious that utility driving moved to shared and perhaps autonomous technologies, over the course of time," Dairmuid O'Connel Tesla VP Business Development.

This is the first time that an officer of the company has gone on record with this since I first fielded the subject in July 11th 2015 (Quora) - later picked up by Adam Jonas on subsequent ER.

 

[hockeythug]

v interesting. Could mean that the existing old MS body weld line will be decommissioned. My understanding is that space will eventually be used for model three production

This was the plan from this year. not sure if plans have changed.

Will it require another shutdown?

 

[farzyness]

TSLA showing strength while the rest of the markets tank. This is a great set-up for the announcements ahead (Model 3, cash flow positive, Model X reviews, 2016 guidance, powerwall/powerback revenue)

 

[Julian Cox]

FluxCap

I respect you too. Right now the price is not moving short term. It is trading sideways on modest to low volume, possibly indicative of calm before another minor breakout. My only lengthy input of the day was to request and invite chart guys to jump in! I have interjected here in a bid to calm nerves and assist in capping short term panic losses (and long term regrets) by deliberately introducing some big picture commencing with stuff across the semi short term horizon (that will matter in a space of weeks to months). I apologize if you feel that is obscuring the view / of no direct benefit in your case and I understand that. You need not fear additional essays. Not like it isn't hard work to describe some of this stuff.

 

[chickensevil]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

Thanks for the link! The end comment:

"The path of getting there -- that's the question. And the promise of doing something two- and three- and four years hence do not impress me," O'Connell says. "People doing stuff now? That impresses me."

This is how I have felt and haven't been able to express it quite so nicely. The only car that I am on the verge of being impressed by is the bolt. Noone else has done or shown anything that would make me happy that someone else can make a non crap car.

 

[Curt Renz]

Kicking myself for not buying some $200 puts yesterday when TSLA was at $209. If you see something similar in the future please post it.

Thanks!

January $200 strike price puts will expire worthless unless TSLA closes under $200 today.

 

[aznt1217]

Thanks for the link! The end comment:



This is how I have felt and haven't been able to express it quite so nicely. The only car that I am on the verge of being impressed by is the bolt. Noone else has done or shown anything that would make me happy that someone else can make a non crap car.

I'm not impressed. Model S has been around since Mid 2012. People need to get with the program. The Bolt, while is a nice EV for daily driving is $42,000 starting price. While the sticker is low, the value is also low IMO (but I like performance and spirited driving and such). I'd rather a used 2012 Model S 60KwH than that thing.

 

[vgrinshpun]

There is a great read that did not get enough coverage. Check it out, then decide for yourselves whether or not buying Tesla now makes sense.

Building Tesla: inside Elon Musks car factory of the future (Wired UK)

Thank you for this link - very interesting article. The comments on re-configuring production, as noted by several members before, are very intriguing. The article actually hints that focus of the re-configuring is to provide more separation for the MS and MX production. Here are the relevant quotes from the article:

Its massive factory at Fremont is about to be reconfigured to boost production further

Another remodel is looming, to give more dedicated resources to the Model X.

As I was reading above in the Wired article, another reference to the Tesla production capacity, which I discounted at the time, came to mind. The quote below is from the StreetInsider digest of the December 8th Deutsche Bank note:

We believe that Tesla’s investment spending mayhave yielded more production capacity than we had previously assumed. Tesla’ssecond body assembly line, which will initially produce only Model Xs, hasroughly 540 robots (vs. 140 robots on the Model S line), and we were told thatat some point in 2016 it will achieve approximately 2x the production capacityof the first body line, which continues to produce 1200 Model S’s per week. Consequently, we believe that Tesla’s bodyshop already has production capacity of ~3600 units per week. While we donot expect Tesla to reach the implied capacity of 180,000 units per year anytime soon (we project 84,000 and 113,000 for 2016 and 2017, respectively), wenonetheless view this as a positive data point, as it appears that Tesla hascompleted quite a bit more production capacity heavy lifting than is widelyassumed

I think that Tesla is trying to completely separate production flow for MS from production flow for MX.

Currently production of the body in white for each car has its separate lines, but after that the general assembly area is common for both cars. The original plan was to produce body of MS on dedicated body in white line (cal it #1, with capacity of 1200 bodies/week) until the MX ramp is completed on it's dedicated body in white line (call it #2, with capacity of 2500 bodies/week). At that point the intention was to blend MS body production with MX body production on line #2, while re-using area taken by body line #1 for eventual Model 3 production.

It appears that plans were chnaged and Tesla is working on separating production flows for MS and MX. The most logical way to do so, IMO, would be to add dedicated MS assembly line that is matching capacity of MS body line (1200 cars/week).

So net result would be two production areas:

• 2500 cars/week body line #2 matched to the current 2500 cars/week general assembly line. These two lines will have flexibility to produce MX, MS or blend of the two vehicles.
• 1200 car/week body line #1 matched to the *new* 1200 cars/week general assembly line

The above would allow Tesla to achieve several goals: increase efficiency of the production due to separation, provide for future increase of the total production for MS/MX from 2500 cars/week to potentially 3700 cars/week, while maintaining flexibility on the mix of MS/MX output.

It seems that this might be addressed on the conference call in February and should be something of a positive surprise, especially if coupled with the discussion of strong demand.





- - - Updated - - -

Will it require another shutdown?

Not if the new general assembly area that is matched in capacity to body line #1 is separate from the current general assembly area.

 

[aznt1217]

Thank you for this link - very interesting article. The comments on re-configuring production, as noted by several members before, are very intriguing. The article actually hints that focus of the re-configuring is to provide more separation for the MS and MX production. Here are the relevant quotes from the article:





As I was reading above in the Wired article, another reference to the Tesla production capacity, which I discounted at the time, came to mind. The quote below is from the StreetInsider digest of the December 8th Deutsche Bank note:



I think that Tesla is trying to completely separate production flow for MS from production flow for MX.

Currently production of the body in white for each car has its separate lines, but after the general assembly area is common for both cars. The original plan was to produce body of MS on dedicated body in white line (cal it #1, with capacity of 1200 bodies/week) until the MX ramp is completed on it's dedicated body in white line (call it #2, with capacity of 2500 bodies/week). At that point the intention was to blend MS body production with MX body production on line #2, while re-using area taken by body line #1 for eventual Model 3 production.

It appears that plans were chnaged and Tesla is working on separating production flows for MS and MX. The most logical way to do so, IMO, would be to add dedicated MS assembly line that is matching capacity of MS body line (1200 cars/week).

So net result would be two production areas:

• 2500 cars/week body line #2 matched to the current 2500 cars/week general assembly line. These two lines will have flexibility to produce MX, MS or blend of the two vehicles.
• 1200 car/week body line #1 matched to the *new* 1200 cars/week general assembly line

The above would allow Tesla to achieve several goals: increase efficiency of the production due to separation, provide for future increase of the total production for MS/MX from 2500 cars/week to potentially 3700 cars/week, while maintaining flexibility on the mix of MS/MX output.

It seems that this might be addressed on the conference call in February and should be something of a positive surprise, especially if coupled with the discussion of strong demand.





- - - Updated - - -



Not if the new general assembly area that is matched in capacity to body line #1 is separate from the current general assembly area.

I think the potential capacity is there already, but the question is fine tuning for quality control standards. I think Tesla learned from the past and is being extremely anal retentive about this. I also believe they are front loading all this capacity to make the Model 3 production smoother. It was a key point made in the past that the robots can Multi task and are modular in nature. My speculation is both lines will be dedicated to each vehicle, with the capability of load balancing by having a robot pick up a different tool/flipping a switch to make production smoother regardless of product mix. That or they are optimizing the factory layout/flows for common parts->differentiated parts->same final assembly (requiring manual input). Notice how O Connell said Tesla won't apologize for timing, and I firmly believe this is because they are taking their time to get it right for a smoother future. I'm all for this.

 

[AlMc]

January $200 strike price puts will expire worthless unless TSLA closes under $200 today.

The price action today around $200 is very interesting and could be quite profitable by buying/selling $200 calls or puts. Wish I had the *alls to do so. I don't recommend other people try it but the fluctuation in price has been considerable.

 

[Bgarret]

Hadn't seen this posted yet, and it hasn't gotten wide distribution that I can see. - Panasonic President confirms $1.6 Billion investment in gigafactory.

http://www.greencarreports.com/news...its-1-6-billion-for-tesla-battery-gigafactory

I also enjoy fivethirtyeight.com's more data-driven analysis of economic events. I think this is an interesting article/analysis.

http://fivethirtyeight.com/features/are-we-headed-for-another-recession/