StealthP3D
Well-Known Member
Welcome to Stock Trends Amateur Hour
I hesitate to post this because there's no technical basis (nor fundamental basis) underlying this analysis.
But since I spent a few minutes on it and there's an interesting price movement, I thought I would share it.
Use this info at your own peril.
Q4 was a "so so" quarter. The more recent quarter where Tesla beat expectations was Q3 (a 17% beat).
- Tesla reported Q3 earnings on Oct 20 and you can see that even with a 17% beat, the stock moved just slightly to $909 by Fri Oct 22.
- On Monday Oct 25, the 100k Hertz order was revealed and the stock popped to $1,024 but traded sideways for a couple of days to $1.037 on Wed.
- Then with no news it moved to $1,222 over the next 7 trading days. An 18% move while the NASDAQ was up 5%.
- Volume was very high on Nov 1 & 2 (likely a whale scooping up shares).
Perhaps we see a similar delayed response to this Q1 2022 beat.
View attachment 796375
Absolutely this is a trend (delayed response to blow-out results). It's been happening for years and is not typical of the behavior I've seen in other growth stocks I've followed closely. Of course, the evolution of the market should eventually reduce this effect over time, if it becomes too predictable.
It makes sense too because so much money is playing bull options for the week of earnings. Then, as options players figure out that TSLA often has a delayed response to excellent results they have learned to buy themselves another week of time and, thus, the bulk of the stock price's response is further delayed. The natural progression would be for option players to start buying themselves another couple of weeks or even a month beyond earnings releases.
There is no doubt that the options markets dulls the equity market's response to new information and the larger the options market becomes relative to the trading of the underlying equity, the bigger this distortion becomes. When the imbalance becomes as large as it is for TSLA, a very profitable situation is created for market makers because they gain more leverage over the share price and more easily jerk it around to maximize profits.
Last edited: