Short-Term TSLA Price Movements - 2016

[anticitizen13.7]

This has to be one of the funniest bear articles I've ever read. The author basically insists demand for the Model 3 is limited, because the majority of people expressing interest today are tech savvy and well educated people.

And this is the reason people shouldn't sweat price movements like today's (less than 1% down).

By the time the "mainstream" gets it, TSLA will likely have taken off. Most people don't understand that it's not just the car. It's the Supercharging network too. Without a Supercharging network, a 200-mile electric car is still fairly limited compared to its gasoline counterparts. The article talked about tech, and OTA updates, and neglected the charging network.

 

[Lump]

Yeah, Jesse needs to be allowed back. Is he actually still banned, or is he just staying away of his own volition? If he's banned still, that's something the mods should swallow their pride on and fix.

He still banned & doesn't know what rule he broke & what warranted a permanent ban...he wants to return.

 

[Cattledog]

Indeed, it was written by an executive for an oil and gas exploration company. Quoting one employee of a computer company hardly indicates that only similar people would ever want to buy a Model 3. Surveys showing that early Tesla buyers were in the computer industry are not surprising considering that they could afford a Model S and live in Silicon Valley where it is produced. Eventually all sorts of people will want a Model 3 when the see them on the streets, just as a century ago the masses wanted a Model T.

In my architecture firm of 90 (80 full-time) we have 11 reservations that I know of. We use technology but are not a tech company. We appreciate things that fuse great design and performance.

Model 3 appeals to people who like:
. technology
. design
. performance
. innovation
. tax credits
. gas savings
. made in America
. comfort
. avoiding auto dealers (actually 99.9% of the entire adult population)
. free supercharging
. software updates
. joining a meaningful movement
. and so on

 

[MikeC]

He still banned & doesn't know what rule he broke & what warranted a permanent ban...he wants to return.

Seriously?

I thought he just got sick of being banned and gave up on TMC. Do we need to start a petition to let him back in or what? The guy really knew his stuff and was a major asset to the forum.

 

[Fallenone]

Seriously?

I thought he just got sick of being banned and gave up on TMC. Do we need to start a petition to let him back in or what? The guy really knew his stuff and was a major asset to the forum.

Count me in for this petition.

 

[MitchJi]

Concerning Q1 ER... This is a tough one.

Pros:
1) M3 deposits, although only 1 day's worth.
2) M3 stuff... but nothing we don't know
3) X deliveries (but not as many as expected)
4) Guidance. Here is where things are positive.

I don't understand why everyone is I gnoring the following two items:

They will definitely talk about MX production (should update be 3-4K)!and deliveries in April and early May.

One full quarter of TE production at the GF. The first win the automated line. How big a line did they build? The two numbers that make sense are 15 gWh or the capacity of the phase one GF, about 5 gWh. And they already spent the associated cap-ex.

 

[BobSk]

Current reservations for the Model 3 represent $13 billion in sales, that's about 1/10th the size of Ford. The respective market caps are: $32 B and $50 B. This looks to be insane, but the stock market has never been rational. On the one hand, I'd like for my Tesla stock to continue to rise; on the other, I'm in the process of selling a house and wouldn't mind a temporary dip in the stock around when I close.

I wouldn't compare Tesla with Ford in terms of sales. This is one of the favorite reasons why some are so determined on the short side. When Netflix started, it's sales were very small compared to Blockbuster. At that time Netflix seemed quite overvalued, Blockbuster undervalued. Now look back, Netflix continued to rise 100 fold, Blockbuster went to zero.
Tesla vs. Ford is not exactly the same comparison, there is some similarities. If you think in the future other car manufactures will be able to bring compelling cars against Tesla, then probably Tesla is not suitable for large investment. In my view, Tesla is a new business model, other manufactures will not be able to compete. I think Tesla will take a significant market share and earn a healthy margin. Other car companies will struggle for many years. Some will bankrupt along the way. In this view, maybe Ford is too expensive, Tesla is significantly undervalued.

 

[Julian Cox]

I've been wondering about this as well. My strategy right now is based around a large q1 ER dip and buying followed by the q2 "shocking" non gaap beat and subsequent stock gains. If the new production plans mean immediate spending that would harm fcf positive plans, my strategy probably suffers.
With Wheeler saying cash is king, I don't know how to read these somewhat conflicting needs. Makes it difficult to predict what the irrational market will do in response.

Just to reiterate nothing new - I think we now see the tide pulling away from the shore in preparation for the Tsunami of hurt for the ages in the back half of the year. Calm before the storm - pick an analogy. If you are in the money here, hitting the bank it button is probably not silly - was less silly at $255 when I called it and called quits on calling it for now.

The short term price movements before clarity resumes are IMO going to be random in periodicity and amplitude - way beyond my ability (or interest) to call trades. Some kind of asynchronous technical straddle targeting a downtrending MA I suspect is the answer for the next six weeks for those that need to trade regularly for whatever reason. Powder dry for the main event should IMO be the target here.

For those that are ok with weathering whatever happens between now and being delighted this will be a very good year indeed. P.S. No way am I buying into the FUD about Model X demand issues - that is just asinine. Maybe the rate of joining a very long line for the Model X is tempering and maybe the reservation line is temporarily shorter than it once was but that is hardly relevant. Production is booked out for months in advance, production issues seem to be solved and anyone that was ever interested will be back with ten of their friends on the first clear signal that Perfect X production is no longer a hassle or an excessive delay. Not like you can just buy something equivalent if the X is what you want. What matters here is that X is no longer costing money to develop but accumulating money at 750-1000 cars per week (like $100 million per week of revenues contributing both cash and profits on a piece of business that used to be a loss and expense center dragging down the net results produced by Model S sales).

If someone is in need of good news for a spike here, then I suspect updates about the progress of Tesla Energy surrounding the impending Gigafactory Unveil is the best shot going. There is likely a useful bit of upside surprise in there.

 

[jkliu47]

No, but new design, clearly AP 2.0 hardware (look at the above link, check out the mirrors), and bioweapon defense mode + new seats, I believe.

I don't think there is any added hardware for AP 2.0. That blip on the mirror is a shadow/reflection artifact off the chrome from the studio lights.

 

[generalenthu]

Is there a date for the gigafactory unveil. Wasn't it supposed to be April?

 

[Krugerrand]

I don't view service centers as particularly difficult or expensive. Leased building. Not excessive pay. Just all part of growing.

Didn't Tesla just spend $3 million in Utah for that SC combo that they couldn't occupy? The new SC combo in Brooklyn also looks like a pretty expensive renovation, no?

Adding (because I can get enough dislikes on my own without Aub's wrath): the expense of expanding SC's and the like I think is definitely worth considering when looking at the bottom line and thus the viability of investing in Tesla/TSLA, blah, blah, blah, blah....

 

[Krugerrand]

He still banned & doesn't know what rule he broke & what warranted a permanent ban...he wants to return.

As someone who has been banned before, you can tell him that he refused to play nice with others and abide by that forum rule. Too bad because he had an interesting blend of long term TSLA belief and short term trading strategy which some found useful.

 

[austinEV]

This year, we were looking at Non-GAAP profitability Q2 and Q3, and GAAP in Q4. That was based on increased revenue and decreased capital spending. If they decide to increase spending to accelerate production of the Model 3, we could be looking at losses all year. That would be good for the company long term, but could cause the stock price to remain below 300 all year. Thoughts?

I really hope they DO polish a quarter or two and suspend investing for a bit. The whole point was to remind the market and critics that they do really make money on cars, and this is the perfect/only time to do it. Besides, they can do a lot of pre-work on the model 3 like site selection or whatever without spending a lot of money. Remember, the perhaps not crazy theory is that Elon and Wheeler are looking to burn the shorts deliberately for a cap raise. It isn't necessary but everything is lining up to allow it. Why not?

 

[dc_h]

Comparing Ford v Tesla might be more like Compaq versus Dell in 1990. Tesla has more potential. It has Apple appeal and the Dell direct model.

 

[Lump]

Requesting a Mod to contact jesselivenomore

He doesn't know what rule he broke that warrants a permeant ban & how to get unbanned.

 

[dreamingof3]

Kinda shocked no one has touched on new short interest numbers yet so I will. Am I the only one surprised that short interest increased to 32,329,352 for the period ending 3/31 released today???? According to fud central the move in tesla from 143 to 230 was from "short covering". Why doesn't someone call these analysts out for the liars they are? There was zero net covering while tesla started running. Grab your popcorn people because this short squeeze is gonna be violent.

 

[tinm]

Regarding jesse (and also Julian): TMC needs to update its policy statement to explicitly describe the process of banning: what will trigger it, what type of ban it is (temporary? for how long? or permanent?), what appeal process there is, what process is used to make the decision, what official channel is used for admins and banned user to communicate, what timeline TMC admins must follow in terms of lifting a temporary ban, how TMC admins (and banned user) can be held accountable to stick to the process, how the TMC community can find out who was banned and why and under what terms and when the user will be invited back (or not), etc. Bottom line: better transparency, better accountability, better community. How about it, TMC?

 

[Papafox]

Today's trading illustrates a couple points. First, the earliest hour of trading is often referred to as "amateur hour" because this is typically when smaller traders new to TSLA typically buy their shares. The day's direction of movement hasn't yet been determined, and so there are often advantages to holding off a purchase or sale until you get a better reading for what TSLA is going to be doing that day.

Let me offer a controversial theory here. You see how there are lots of strong downward spikes in the trading today? I have seen similar trading when the short numbers have been growing and I suggest that the sharp downward spikes when there's no big news, followed often by recoveries and then more sharp downward spikes are an indication that shorts are selling to enter new positions. It seems to me that if you are a long and wished to trim your position, you would sell in a gentle fashion so as not to hurt the value of your remaining shares. On the other hand, if you are a short opening a new short position, you'd like to make a big impact with your sale and you sell all at once to get the stock heading downward and support your existing short positions.

Take a look at one of the slowest trading periods during the day: 11:00am - 2:00pm. This is when the stock fell downhill to its lowest value. Shorts like to buy when there's light volume to maximize the negative impact of their selling. Notice how the volume picked up as TSLA rose after 2:00pm.

I suspect we'll see high numbers of shorts in TSLA when we look at the numbers covering the middle of April. Although the number of shorts undoubtedly fell somewhat during the sprint up to 266, I believe the strong downward spikes today with no strong negative news to influence the stock are signs that some shorts are currently reloading their shares. High numbers of shorts at these relatively-high share prices will of course be a necessary ingredient for an intense short-squeeze later this year if Tesla's financial numbers meet or exceed recent guidance by the company.

 

[DesertCO]

Kinda shocked no one has touched on new short interest numbers yet so I will. Am I the only one surprised that short interest increased to 32,329,352 for the period ending 3/31 released today???? According to fud central the move in tesla from 143 to 230 was from "short covering". Why doesn't someone call these analysts out for the liars they are? There was zero net covering while tesla started running. Grab your popcorn people because this short squeeze is gonna be violent.

I agree. I would also like to point out that 28.59% are short of float. There was no (minimal) short covering on the move to $230 (in Feb there were 34.05M short, and in March 32.23M. I have watched quite a few different fundos and have a feeling this is going to be a face rip short squeeze if it isn't forced down.

The first pivot point that has to be broken and maintained is 251.8, the second pivot at 255.9. If those levels are broken and held for consolidation -- there will be a short squeeze just above that. If it cannot hold those lines soon, it's very possible we are headed to the
retracement at 239.9.

However, I have been in this stock both long term and short term trades for several years, and I can tell anyone listening -- technical fundos hold very little currency with TSLA. In fact, it behaves more like a tech stock in regards to it's patterns. Typically there is a low within a week after a release, or major announcement -- this is profit taking from specs. After which it forms a new consolidation at a much higher level 2-3 weeks out.

In essence, this is headed to the second 255 pivot point where it will build consolidation. However, it may be taken in to the 235-239 range by bears before that happens. I doubt it on fundos, but again, this behaves like a tech stock.

 

[Julian Cox]

Regarding jesse (and also Julian): TMC needs to update its policy statement to explicitly describe the process of banning: what will trigger it, what type of ban it is (temporary? for how long? or permanent?), what appeal process there is, what process is used to make the decision, what official channel is used for admins and banned user to communicate, what timeline TMC admins must follow in terms of lifting a temporary ban, how TMC admins (and banned user) can be held accountable to stick to the process, how the TMC community can find out who was banned and why and under what terms and when the user will be invited back (or not), etc. Bottom line: better transparency, better accountability, better community. How about it, TMC?

I just volunteered some time and efforts to prevent people losing their shirts in January and February and helped point out the rest and why of it up to $255. Those that listened, understood and acted accordingly are richer. Those that were swayed to disagree and bail at the bottom are significantly poorer as well as missing a $100 of straight gains. Got banned twice, once for reacting to being abused repeatedly, secondly for taking a victory lap. I was targeted by someone who was spewing fear backed by generalities and claims of personal authority and was dangerously and arrogantly wrong - and targeted me with his banter to the point of getting personal - while intermittently claiming to pick up on the trades that I was suggesting against his better judgement!

If that is what is welcome here by anyone in their right mind under any circumstances then I am amazed. The worst of it all was that he was not a clear cut fudster or some moronic Seeking Alpha insurgent and could well have duped some of the more credulous TMC members as well as guests checking in to check the temperature into considerable real personal losses.