Some views on current price action

[LargeHamCollider]

@jesselivenomore I'm interested to hear your comments on the current situation, technicals look neutral to slightly down to me (though I'm no TA pro) but future catalysts in M3 production and autopilot look to be on the near horizon. Personally I'll be entering a new position some time in the next month unless something unforeseen occurs.

Also bumping this thread .

 

[ZenMan]

Not much beyond my prior post. The delivery number was in line and Model 3 below expectations, which meant a follow through of the bearish technicals(after an initial oversold bounce). Unless something very positive comes out of ER, we should get to at least the low 300s, which was the prior low in July and the weekly bollinger bands. Looking at the monthly charts it also doesn't look great, and could actually measure to the 270s or 280s.

Then again Amzn had very ugly looking technicals before ER, and of course that all changed after the gap up. News and earnings still trump charts, which is just a way to read sentiment. So we will see tonight. If nothing huge changes, then the technicals are more likely to follow through.

Beyond techincals, it's pretty clear everyone is just waiting for the model 3 to ramp, or at least signs of it. Before that happens the path of least resistance is sideways or down(due to prior runup).

Jesse,

Could you give an update on what you see now with TSLA? At what price level would you be an aggressive buyer? We may close in on ATH before the next earnings call.

Thanks.

 

[Zhelko Dimic]

@jesselivenomore Any colour here from TA perspective?
Do you see us going under $280, and if that's a real possibility, do we stop at $250?

 

[jesselivenomore]

Last week's weekly candle was a dark cloud cover/bearish engulfing, this was made worse after rejecting the all time highs. Based on technicals alone this is a no touch here and a sell below 340. However, keep in mind that delivery numbers come out in a week and a decent sized gap from that can invalidate any technicals. If we get a below consensus number, or even just inline, I think the bearish technicals play out. We need some consolidation this week and then large gap up to reset price action back to being bullish.

Sorry guys for the lack of updates, but honestly since we put in that bearish engulfing on the weekly mentioned above(and shown below) we have been range bound with a bearish bias as expected, without much else to say. That's changed now, as we put in a mirror bullish pattern last week, with follow through confirmation this week. We even got a double bottom to go with it to complete the symmetry. Just like how the bearish pattern made the stock a no touch, the price action the last two weeks means we need to start paying attention again for a possible end to the consolidation and start of a new trend. While that is encouraging, we do not have confirmation yet. Until then, here are some things to look out for.

Timing is something that can hint at when the consolidation is ending. Throughout TSLA's history its trends have been fairly cyclical. There has been a ton of symmetry and nearly every major pullback has followed a 30ish week pattern. Some examples:

Two of these pullback periods coincided with the Model S and X launch, so perhaps it is a reflection of Tesla's production ramp schedule. Or perhaps the institutions investing in Tesla have their own accumulation patterns that results in this. Whatever the case, since it has repeated itself multiple times, this is something to pay attention to. I am certainly not saying every major TSLA pullback in the future will follow this(it won't), but until it deviates this is useful:

Next week we have major resistance between 360-366. This is the prior high from January, top of the daily bollinger bands, top of the weekly EMA bollinger bands. It would be great if we just bust through this area, but I am expecting a rejection and pullback at first. IF that happens, the week after(March 5) will be crucial - follow through to the downside signals that we remain range bound, a push back up above 360 signals the start of new uptrend.

Also, IF this is the start of a new uptrend, we should not go back below 332 which is the weekly midband(ema). And ideally stay above the daily cloud at 340. Failure to do so would again indicate we are still stuck in range.

When we first broke above the 280 range I mentioned that the move measures to 380 initially. This time, a breakout above 390 measures to around 600 with initial resistance around 460. I do not expect a breakout to occur until delivery numbers show ramp progressing, so watch for April 3 and July 3. A bullish scenario would be a push to 380s then consolidate between there and 360 until a breakout in deliveries.

 

[DaveT]

@jesselivenomore As we passed $350 last week, I thought of you and was wondering what you think of TSLA from a technical standpoint?

 

[sundaymorning]

@jesselivenomore As we passed $350 last week, I thought of you and was wondering what you think of TSLA from a technical standpoint?

I’m no Jesselivenomore, but I would imagine his prediction is still the same? Anyone able to chime in on Jesse’s prediction with a technical background? We might as well put this thread to good use until Jesse decides to say “hello” again?

 

[PaulusdB]

@jesselivenomore As we passed $350 last week, I thought of you and was wondering what you think of TSLA from a technical standpoint?

She/He has bigger fish to fry: Elon Musk vs. Short sellers

 

[jesselivenomore]

@jesselivenomore As we passed $350 last week, I thought of you and was wondering what you think of TSLA from a technical standpoint?

I'll update later. Feel bad that I haven't. I've been in contact through private message with a couple of TMCers the last few months. They can chime in here in the meantime if they want.

 

[DaveT]

I'll update later. Feel bad that I haven't. I've been in contact through private message with a couple of TMCers the last few months. They can chime in here in the meantime if they want.

No worries. Your new short sellers vs elon thread is great.

 

[Zhelko Dimic]

Jesse feels that environment is similar to the end of 2016, just before we broke through. He thinks It's likely that we're building towards break-out. That said, situation is fluid and there are never any guarantee. It's hard for me to convey nuances, so I'll let Jesse weight in, but I know that he was also expecting a bit of consolidation first.

Now, from my point of view, I am a bit concerned we haven't seen any consolidation, and I have hard time believing we can break out in a straight line. I also am concerned that between now and end of Q3 TSLA underwhelms (esp. Q2), so while I'm very pleased with SP performance, and I believe we will eventually break out, I expect a bit of a dive. Deep dive, or shallow one? is the question. To that extent I've been continuously (but slowly) dropping my leverage on the way up. And I want to believe Elon has something in his sleeve to burn short sellers, but I've lost my faith in his predictions.

That said, I didn't read yet Jesse 'Elon vs Short Sellers" series, maybe something there makes me change my mind

 

[Zhelko Dimic]

After reading @jesselivenomore excellent 'Elon vs Short Sellers" series, I'm wondering what if Elon figured out the same thing that Jesse did? I have never fully bought into any conspiracy theory before, yet, I'm finding that this one resonates deeply with me. I believe it to be very close to what has actually happened. I don't think Elon made all the same elaborate connections like Jesse did, but what if he did enough, and footed the bill for initial investigation, and 3 weeks from now there is a reveal, or lawsuit, just like Fairfax guys?

BTW, I remember seeing Gordon Johnson coming out of Vertical group (unknown outfit) first time and thinking, man, this guy is so polished and sleek, and spewing such non-sense that he must be professional assassin, gun for hire, paid to hurt Tesla. I've been thinking that every time I see it.

Imagine my surprise that Jesse dug out how the same guy was active and instrumental in SCTY demise? And then this guy from unknown new outfit gets to be interviewed all the time? Unreal... Someone must be asking for some favours to place him so prominently. And then Lora Kolodny... And Mark Spiegel talking at major conferences? Who is pulling strings behind the scene? Is it a single person, or set of short hedge funds? At some point, all these coincidences become too much for anyone to swallow.

Great work Jesse!

Elon, if you haven't already, please get some investigation going. Too many people have been involved in this slander campaign for all the traces to have been buried... (@bonnie)

 

[steve3]

After reading @jesselivenomore excellent 'Elon vs Short Sellers" series, I'm wondering what if Elon figured out the same thing that Jesse did? I have never fully bought into any conspiracy theory before, yet, I'm finding that this one resonates deeply with me. I believe it to be very close to what has actually happened. I don't think Elon made all the same elaborate connections like Jesse did, but what if he did enough, and footed the bill for initial investigation, and 3 weeks from now there is a reveal, or lawsuit, just like Fairfax guys?

This is EXACTLY what came to me reading his thread earlier today.

Thanks hugely, @jesselivenomore for sharing these insights...saying it here to avoid diluting that thread.

 

[DaveT]

@jesselivenomore Would love to hear your current thoughts on TSLA price action.

 

[jesselivenomore]

@jesselivenomore Would love to hear your current thoughts on TSLA price action.

I've been using Ichimoku Cloud breakout + Bollinger break combo as an entry for TSLA for awhile now. It's worked well as an indicator for TSLA over the years, and even when it fails it usually generates enough upside cushion to exit comfortably.

Had a small position going in, but really started adding at $320 which is the aforementioned combo breaker.

The last breakout, which failed, was at $335. It still got you to $390 during the funding secured mess.

The prior one to that was $302 and got you up to $370. To me this still counted as a failure as a trend breakout, but $70 upside is good trading profit even if you missed the top.

Some examples of successful trend breakouts using this - Dec 2016 @ $202.

And Jan 2014 @ $155.

In general over the years it has worked out(there has been lots of examples), with a few exceptions when it reversed after a few days.


As for thoughts, TSLA is breaking out based on these technical indicators, the monthly also just printed the biggest reversal in awhile(ever?) But lately TSLA has had a penchant for failing its breakouts, a few times due to drama outside of technical's control. Meanwhile, fundamentals have shifted at a time when disinformation is at a peak leading to irrational fear(at least before last week). Couple that with a macro pullback and you have a tremendous opportunity for investors, IMO. If it were not for those factors we would not have been trading at below 2.5 times sales(ttm) last week. Personally I am going to keep playing these breakouts, and try to limit losses or if lucky protect a gain when it fails. And the time it is successful - hold on for dear life. The upside potential for a successful breakout, considering all factors - depressed sentiment, short covering, increasing profitability, S&P inclusion - is tremendous.

One last factor in considering potential upside is - hype - Tesla owners, investors, evangelists in their echo chamber may have believed that the "iPhone moment" arrived when people lined up for reservations in 2016. They would be wrong, because those people who lined up were Tesla owners, investors, evangelists themselves. The "iPhone moment" is when it reaches those who never considered buying it, the indifferent general public that does not have a horse in the race. We have not reached that point yet, but with Tesla hitting scale just last quarter, every single Model 3 hitting the streets of family, friends and strangers brings us closer to that moment.

 

[wnorris]

One last factor in considering potential upside is - hype - Tesla owners, investors, evangelists in their echo chamber may have believed that the "iPhone moment" arrived when people lined up for reservations in 2016. They would be wrong, because those people who lined up were Tesla owners, investors, evangelists themselves. The "iPhone moment" is when it reaches those who never considered buying it, the indifferent general public that does not have a horse in the race. We have not reached that point yet, but with Tesla hitting scale just last quarter, every single Model 3 hitting the streets of family, friends and strangers brings us closer to that moment.

Great post. Agree completely that we are seeing a lot of parallels between Apple's rise and that of Tesla. The iPhone moment for Tesla will likely be more muted and harder to 'see' than it was for Apple purely due to the price point for a phone vs an auto. It will take more time to reach that tipping point, but they will eventually get there.

I am interested in tracking solar installs vs vehicles to see what type of correlation there is between new Tesla vehicles and Tesla solar installs.