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Short-Term TSLA Price Movements - 2016

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#6,962
Curt Renz said:
Nowadays most stock splits are rather pointless and have become uncommon. It used to be that brokerage commissions were lower if shares were bought in round lots of 100. There arose a complexity if a brokerage or market maker had to break up a round lot. That is no longer the case. Today one can buy a single share at the same commission as 100 or many more, and the computers handling the trades have no problem with that. As Familial Rhino noted, doubling the number of shares while cutting the value of each share in half implies that daily price moves would be halved while the percentage that represents would be unchanged.
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I understand that part.

Now if you want to do options trading where 1 option represets 100 shares, it gets kind of expensive.
When a share price is at 500 or 700 with one option you are moving 50,000 or 70,000 worth of stocks. A bit much for some retail traders.

To me the sweet spot for a stock price is in the 50 to 250 range.

Now splits of 1:2 don't make so much sense, but I liked the AAPL 7:1 split. I do believe it helped the stock for psycholgical reasons.
 
#6,963
jesselivenomore said:
Just to elaborate a little on the first part and what's happening right now.

When TSLA broke below 180 last month, it created a vacuum to the downside triggered by stop losses, weak hands selling, and shorts piling on. 180 was support for the past 2 years, so trading below it signaled a potential major breakdown and trend change. TSLA was already froth with bears and shorts, but this breakdown brought on selling(short) from even agnostic traders who have no inherent fundamental bias and are simply trading on technicals and price action. This is why you saw short % increase as opposed to decrease as price declined. Many of these agnositc traders sold through 180, and waited for a bounce to add on to their position. This is standard trading procedure, like longs buying, then waiting for a pullback to add more.

They use different methodologies to determine entry points to add to their short:

support/resistance - 180 as prior support turns into resistance once broken. Many shorted on the way back up to 180.
fibonacci retracement - many use this to determine the turning point. 180(38%), 192(50%), 205(61.8%) are all levels that traders will sell.
bollinger bands - mid band at 172, upper band at 207

So that is why they are selling, and where they are selling. They view a break of long term support of 180 as a change in direction for the stock, and use technical levels for entry into their short.

Trading like this works plenty of times, and I don't blame traders for it now. However, I believe they are wrong in this case. Even though they are correct that short/medium term technicals signaled a breakdown, which is their reason for shorting this bounce - they are missing what long term technicals are saying, the monthly hammer candle. For those unfamiliar with chart patterns and candlesticks, a monthly hammer is simply a bar on your monthly chart where a major decline is completely reversed and closes at or above where the month began, visualized in the shape of a hammer. Simply put what this visualization is telling you is that the breakdown was false - it was immediately reversed with no staying power. This is in accordance with the fundamental backdrop - the decline was due to fears of a freeze in the credit markets(tesla needs credit to grow) - those fears are now abating(look at xlf, hyg, db, cs).

So what you have now are traders shorting based on a false breakdown while oblivious to the long term technical reversal - a bear trap. If share price gets above 205 and stay above it, these agnostic traders/new shorts will start to exit - they have no inherent bias against TSLA, just in it for the trade. This exodus could bring share price to above 220 which would put pressure on the real bears and core shorts. This is the 20+ million shares that have been in for years and are short based on their fundamental views as opposed to based on price action. This contingent will only cover for two reasons: 1) a fundamental change - earnings 2) pain. That is why 220 starts to get interesting - that is when it starts to hurt.
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Thanks for the analysis. Highly appreciated!

I bought at $203 today, been waiting for a while for a lower entry point for my last buy-in but gave up :).

What do you think is the main reason it went up so much the last week? Is it buyers that buys into the Model 3 reveal or is it mostly price action trading?
 
#6,964
lango said:
Thanks for the analysis. Highly appreciated!

I bought at $203 today, been waiting for a while for a lower entry point for my last buy-in but gave up :).

What do you think is the main reason it went up so much the last week? Is it buyers that buys into the Model 3 reveal or is it mostly price action trading?
Click to expand...

100% macro. Same reason why we went down so much before. There was macro fears related to liquidity and credit - banks, particularly european ones were the leaders to the downside starting in January. TSLA is especially sensitive to this type of fear/risk since it is so reliant on access to the capital markets(at least the market views it as such), hence the oversized decline and recovery.
 
#6,965
A piece actually worth reading on SA by a battery separator manufacturer who thinks costs can get to $50/kWh
This week at the NAATBatt Annual Conference, there was a symposium on technologies to reduce costs in lithium ion batteries. I was blown away by the potential, and what it can mean for Tesla (NASDAQ:TSLA) and GM (NYSE:GM). First, I provide a short intro to the technologies. Then, I discuss what it will mean for the Tesla Model 3, the Chevy Bolt, and the future of electric vehicles.
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http://seekingalpha.com/article/3954736-future-batteries-tesla-model-3-chevy-bolt
 
#6,971
Just got a call from Tesla in Fremont about my unconfirmed Model X order and if I have any questions or issues preventing me from confirming (I'm getting a 70D and saving up, so I'm in no rush to confirm). I don't think they'd be so proactive if production wasn't ramping up well.
 
#6,974
dha said:
And there it is!
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Basically $201, very nice.

What is striking about this run from the bottom, is that it is not truly about TSLA. Look at any chart, AMZN, NFLX for instance, it is the same "V". ($SPX too nearly the same). That means we aren't even seeing any run-up "buy the rumor" pressure for the model 3 release. Think about that for a second. There are huge positive catalysts on the calendar and we seem to be getting no or little movement on that. We *should* enjoy a greater Beta in March at some point on up days and eventually decouple and go up on down days as well. The shorts might be feeling it worse if they (as they seem to have done) chose TSLA to be a high beta short candidate. In summary, it feels like we are a rocket on a launchpad that hasn't even launched, rather the launchpad is rising.
 
#6,975
MikeC said:
Just got a call from Tesla in Fremont about my unconfirmed Model X order and if I have any questions or issues preventing me from confirming (I'm getting a 70D and saving up, so I'm in no rush to confirm). I don't think they'd be so proactive if production wasn't ramping up well.
Click to expand...

Care to share your reservation number? How many X do you think Tesla is producing now?
The rate mentioned in Q4 delivery note was 238/week at the end of 2015. But the insideevs.com estimate is less than half of that for each of Jan & Feb. Let's see what March brings.
BTW, was there a test drive event in LA?
 
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#6,976
I went in on standard stock around 190 and its looking good so far.
Not an options expert, but now that it seems clear the economy isn't tanking anytime soon and also with looming catalysts...any short-term TSLA suggestions for a novice with some spare money to play with?
 
#6,977
austinEV said:
Basically $201, very nice.

What is striking about this run from the bottom, is that it is not truly about TSLA. Look at any chart, AMZN, NFLX for instance, it is the same "V". ($SPX too nearly the same). That means we aren't even seeing any run-up "buy the rumor" pressure for the model 3 release. Think about that for a second. There are huge positive catalysts on the calendar and we seem to be getting no or little movement on that. We *should* enjoy a greater Beta in March at some point on up days and eventually decouple and go up on down days as well. The shorts might be feeling it worse if they (as they seem to have done) chose TSLA to be a high beta short candidate. In summary, it feels like we are a rocket on a launchpad that hasn't even launched, rather the launchpad is rising.
Click to expand...

Funny how everything was looking gloomy a few weeks ago and now everything is hunky dory. The market is very bi-polar sometimes.

I am very interested to see if we can accelerate to the upside. Will be initializing a strangle soon, so would love to see some further action. Thinking of buying 2 calls and only one put to leverage towards the bullish side. Looking at Jan 17s
 
#6,978
#6,979
austinEV said:
What is striking about this run from the bottom, is that it is not truly about TSLA. Look at any chart, AMZN, NFLX for instance, it is the same "V". ($SPX too nearly the same). That means we aren't even seeing any run-up "buy the rumor" pressure for the model 3 release. Think about that for a second. There are huge positive catalysts on the calendar and we seem to be getting no or little movement on that ...
Click to expand...

The fact that February was essentially net-zero change (no change from the start and end of the past one month period) at about $200, and the bounce back up 42% from the $141 low mid-month was 100% macro related, this is great news. I'd much rather see these positive catalysts in 2016 to actually add to the stock's value, rather than the current trend of always merely making up for a recent FUD overreaction and market irrationality that effectively cancel out these legitimate and relevant catalysts.

theschnell said:
Funny how everything was looking gloomy a few weeks ago and now everything is hunky dory. The market is very bi-polar sometimes ...
Click to expand...

Since January, some media outlets were warning of fears of a potential recession coming back this year. What happened to that fear-mongering freight train? Must've been derailed somewhere lol.
 
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