sundaymorning
Active Member
Looks like we’re consolidating a bit before a breakout. A good place to be, I’m happy with TSLA’s performance.
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jhm
Well-Known Member
I had forgotten about seasonal variation in trading. (And I'm on vacation myself.) "Sell in May, walk away." So come fall the production nbers will be more substantial just in time for a return to active trading.
ValueAnalyst
Closed
I usually don't subscribe to calendar-based theories, but especially this time, I think the summer of 2018 will be positive for TSLA, both for fundamental reasons (i.e. Model 3 production ramp and energy storage profitability surprise), as well as surging oil/gasoline prices, as we have discussed before.
Only for this Friday, and a Summer Friday when the volume could be unusually low, I think shorts/MMs have the perfect opportunity to manipulate the stock lower for a pin that takes out this week's profits from call option holders. I may be wrong, and my fingers are crossed for me to be wrong, but just putting out my hypothesis for later testing. As always, I remain long for the longer term potential in Tesla through mostly stock.
Bring up the weekly chart, turn on MACD and take a look. I think big rally is coming. I'm not talking about weekly moves. I'm talking about the next 6 months and potentially the next few years.
This chart lines up with the fundamentals and Elon's "burn of the century" prediction. There is also fuel from the large size of crazy shorts. I will continue to save every dollar to add shares.
This chart lines up with the fundamentals and Elon's "burn of the century" prediction. There is also fuel from the large size of crazy shorts. I will continue to save every dollar to add shares.
This sounds right to me -- I would also add that increasing attention on the high short interest and losses and the precarious position many shorts find themselves in may add to the FOMO and tempt investors to jump in sooner rather than later to avoid missing out on a sharp upward movement.
We also have the possibility of a spike from new info such as a weekly production email leaking out or a China announcement (although I assume anything concrete on China will be July/August or later).
On the flip side, I continue to worry about macros. The Nasdaq is back at ATHs and I am not sure the economy can do much better (which means the risk is to the downside IMO). At the same time the political environment seems much more unstable than normal. There are also the usual AP issues, f*res or other coordinated fearmongering that can always take back over and change sentiment.
I am quite surprised (although maybe I shouldn't be) that smarter shorts do not seem to have taken into account the German engineering report on Model 3 costs. An independent third party has put a dagger in the heart of their "Tesla is structurally unprofitable" thesis. Confirmation bias is very powerful but at some point it may start to settle in that the gig really is up and that they should cut their losses (or lock in their gains if they were one of the lucky few to short at higher SPs).
bdy0627
Active Member
This was a very helpful financially-focused article. Thanks for the link!
cheshire cat
Member
Mike Smith
Active Member
I think a lot of shorts have been waiting for an opportunity to trim their recently expanded positions, and will give up and do it near the end of the day before the weekend.
I seriously hope they stay short. The show has not started yet, if they leave, then where is the fun?
sundaymorning
Active Member
Some improvements to autopilot. Did anyone get the new update yet?
Tesla releases new Autopilot update with performance improvements and new car renderings
Tesla releases new Autopilot update with performance improvements and new car renderings
Mike Smith
Active Member
Waiting4M3
Active Member
I've heard the theory that shorts like to close their positions near end of the day because that's when prices don't move quickly. But if that is a repeatable behavior, wouldn't someone figure out a way to front run that strategy, for example buying shares to drive up the price before this short covering purchase wave?
"...The analyst now believes Model 3 average selling prices are coming in above forecast due to stronger than expected demand for all-wheel-drive and performance configurations. He now estimates blended Model 3 ASP's will approach $60,000 in the second half of 2018. Further, Shah also anticipates cost leverage as Tesla scales to higher levels of production. Tesla can lower per unit costs considerably in the coming months, driven by improved fixed cost absorption and higher labor efficiency, the analyst tells investors in a research note.
..."
Tesla price target raised to $450 from $420 at Nomura Instinet TSLA - The Fly
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Tesla price target raised to $450 from $420 at Nomura Instinet TSLA - The Fly
Is it my imagination, or are the analysts doing their usual of chasing the stock price? ie. the stock priced jumped on no real new news (at least to those paying attention), and now analysts are furiously justifying raising their price targets for a bunch of "reasons", but really, they don't want to get caught out on the share price rising.
jhm
Well-Known Member
One of the ways I watch sentiment on the thread is to observe how much focus there is on shirts rather than on other longs. It takes very little conviction to fantasize about shorts close their positions in a short squeeze. But this does not create much of a rationale for longs to load up. OTOH, when the focus is mire about growing buying pressure from longs, say institutional investors are loading up, then then you've got much more bullish conviction. Longs buy more shares because they don't want to be left behind, rather than because they think shorts will turn tail and run. But bears are not going to run if nobody is chasing them.
This is why it is futile to fantasize about short squeezes. Bears don't chase themselves uphill. All shorting really does is increase the supply the shares available to be held long. Thus, we need more buyers to push the price higher and keep it there. More shorts and more buyers means ultimately more people will be made wealthy by the advance of Tesla. Whether shorts want to keep selling this opportunity would-be longs is for them to decide. Shorts are but hogs to slaughter along the way. What matters are longs who buy with conviction. Why longs should buy is much more important and interesting than why shorts should cover because if you have the former, you need nothing else for the latter.
This is why it is futile to fantasize about short squeezes. Bears don't chase themselves uphill. All shorting really does is increase the supply the shares available to be held long. Thus, we need more buyers to push the price higher and keep it there. More shorts and more buyers means ultimately more people will be made wealthy by the advance of Tesla. Whether shorts want to keep selling this opportunity would-be longs is for them to decide. Shorts are but hogs to slaughter along the way. What matters are longs who buy with conviction. Why longs should buy is much more important and interesting than why shorts should cover because if you have the former, you need nothing else for the latter.
ValueAnalyst
Closed
So far going as expected, despite the positive news about P3D production start. This is a buying opportunity.
sundaymorning
Active Member
Let’s hope more news like this come pouring in next week, looking forward to closing above $320. Next stop $340?
There are a few possible catalysts coming up:
1. China GF, for example if it turns out there's already an investor lined up to fund it and/or the terms are very good with local government.
2. I personally think there's a non-trivial amount of retail investors and some bigger investors who live in the world where Tesla can't turn a profit. When profit happens, they'll be forced to re-evaluate their view and possibly their investment decisions. Basically I think the magnitude irrationality around TSLA is tilted towards the sell side (not that there's no irrationality on the buy side, just a bit less), and it will have to get corrected. Turning a profit will precipitate some of this correction.
1. China GF, for example if it turns out there's already an investor lined up to fund it and/or the terms are very good with local government.
2. I personally think there's a non-trivial amount of retail investors and some bigger investors who live in the world where Tesla can't turn a profit. When profit happens, they'll be forced to re-evaluate their view and possibly their investment decisions. Basically I think the magnitude irrationality around TSLA is tilted towards the sell side (not that there's no irrationality on the buy side, just a bit less), and it will have to get corrected. Turning a profit will precipitate some of this correction.
sundaymorning
Active Member
Aside from Panasonic, I think it’s Tencent. They were showcasing the Model 3 not too long ago in China and they have deep pockets, market cap is $500 billion.
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