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TSLA chart above
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QQQ chart above
Tuesday was day 2 of the mystery dip. The NHSTA autopilot investigation story just didn't warrant anywhere near this level of dip. We learned today that
Model 3 production commenced again on Monday, so the Sawyer Merritt story of the weekend stoppage was not the cause either. China EV stocks sank on Monday and both Ford and GM sank on Tuesday, but those events don't explain TSLA's trading by themselves. Nor do I think that some whale of a investment organization was simply trimming TSLA shares. Monday morning's dip was far too steep for that explanation to make sense, nor would we have seen Monday afternoon's capping to keep TSLA level as the NASDAQ recovered. A big investor would be more subtle in order to avoid the kind of price degradation we've seen in the past two days.
Another indication that someone was trying to push TSLA down (rather than someone was just unloading shares) was that around 1:50pm TSLA actually sank below 650 for a few minutes. Touching 650 would activation stop-losses set at this amount, and I don't think a seller would want to do that.
Instead, I think we're seeing an old fashioned bear raid,, similar to what we saw in earlier days. Don't ask me who is the instigator, but I can tell you that the NHTSA investigation is the necessary fear-inducing catalyst to distract from the real source of the dip. During a big dip event, hedge funds will short on the way down and cover near the bottom to profit from the dip, and I have no doubt that they made some bucks from this dip too. The involvement of hedge funds doesn't explain some of the other oddities of the dip, however, such as Monday afternoon's capping while the NASDAQ rose.
Why would the event take place early this week? One explanation is that TSLA is poised to pop higher. Many technical traders have been drawing charts to predict what comes next. In today's TMC main investors' forum,
@Paracelsus in this post offered a chart with a downtrend of the past 6 months and the uptrend of the past 2 years creating a pennant (triangle) with a tip where the stock will likely break up or down. When TSLA reached the tip of the pennant, it continued to follow the uptrend line, a trajectory that someone didn't like and wished to suggest a different direction of movement. Other charts I've seen have been very similar to this one. With the 50 day moving average about to do the Golden Cross through the 200 day moving average, and with AI Day on Thursday, these potential catalysts when added to the the pennant resolution could easily send TSLA higher. And so someone has decided to redraw the technical chart of TSLA's trading, at least temporarily, to try to fool the market into believing that TSLA is about to break lower. One possibility could be that a big buyer wishes to accumulate TSLA at a good price prior to the break upward. As for market makers, let's see where TSLA closes on Friday. A close near the present max pain number of 685 would suggest their involvement in the mischief.
Fortunately,. TSLA showed a climbing trend after 1:45pm Tuesday, a climb that was steeper than the NASDAQ's. The dip may have played out. Let's see how the macros treat TSLA Wednesday morning.
News:
* Goldman-Sachs reiterated TSLA buy rating
* Cramer is saying "Buy TSLA"
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10 year treasury bond yields are almost down to 1.25% again, which is postive for high growth stocks like TSLA
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Our old friend the 200 day moving average provided support today as the stock price closed just above it
Conditions:
* Dow down 282 (0.79%)
* NASDAQ down 138 (0.93%)
* SPY down 3 (0.66%)
* TSLA 665.71, down 20.46 (2.98%)
* TSLA volume 22.9M shares
* Oil 66.64
* Percent of TSLA selling tagged to shorts: 39%
* IV 45.9, 6%
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