Papafox's Daily TSLA Trading Charts

[Papafox]

Friday saw lots of 900 and 1000-strike options set to expire, and with TSLA trading above 910 going into market open, you better believe there would be a reaction. Thus, we saw a mandatory morning dip to the mid 880s before it jumped back into the green and then jumped back and forth between worry mode and prepare for another good Monday mode.

As @Evoforce pointed out, upward pressure was coming from two main pieces of news: GF4 in Berlin received the needed go-ahead for clearing the trees (and thus preventing many months of delay if nesting took place before the trees could be cleared) and GF3 Shanghai was reported by multiple sources to be back to full production. This second piece of news will directly affect Q1 results because there's sufficient orders already to absorb all the vehicles that Tesla can produce at GF3, and so there was a correspondingly big upward force on the stock price.

The downward force on TSLA yesterday came from the macros. The NASDAQ traded down 2% in the afternoon and didn't show any substantial improvement until the final half hour. Notice the correlation between TSLA and the NASDAQ when macros dipped quite substantially not long after opening. We see TSLA recovering a bit during the pre-3pm slight rise of the NASDAQ, and TSLA recovering further during the final half hour of market trading. The result was correlation to the downward forces (macro) but an overall much better than the rest of the market performance during the day due to the two upward forces.

The majority of us were expecting a close around 900 today, and we weren't surprised. If not for the dismal macros, TSLA probably would have surprised us on Friday with a run upward on the two pieces of good news, but with NASDAQ down 2% in the afternoon, the hedge funds could manage the stock. They kept it sufficiently below 900 whenever possible so that when the buying of the final 20 minutes of the day happened (it started this Friday at 30 mins before close, due to macro rise) the hope would be to keep TSLA below 900 for the close. They almost did it, but the combination of Friday close buying for Monday morning trading and a macro rise overwhelmed their defenses.

Volume today was only 14.3M shares, which suggests longs are not worried and in selling mode. There have been enough opportunities for selling in the 900s these past two weeks that much of the profit-taking at that level is likely complete now. Those sellers have been replaced by new buyers who bought in at these high levels and many likely plan to hold for the long-term.

I did buy 100 trading shares Friday afternoon for sale in first half of the coming week, but with some trepidation. If Friday's dip was the beginning of a broader sell-off of the macros, then my move might be unprofitable. My guess is that much of the worry of Friday will be less on Monday, and even if macros have a bad week ahead, there should still be enough of a jump up for TSLA on Monday opening that I could make a few dollars before the macro forces weighed too heavily on the stock price. Friday's resilience of TSLA to bad macros gives me hope for Monday resilence, if needed. We'll see.

The NASDAQ spent much of the afternoon down 2% and closed down 1.79%

Meanwhile, the shorts continue their covering, which adds upward force to the stock price. One of the reasons I held TSLA during the dips is because when those huge short positions unwound, I wanted to take advantage of the stock price rise they generated. That's exactly what's happening right now.

For the past week, percent of selling by shorts has hovered around 60%, indicating lots of manipulations in an attempt to affect the stock price. Additionally, we saw 434K shares trade in the final minute, which suggests to me that hedge funds and market makers were closing some day-short-positions.

Looking at the tech chart, you can see the 767ish pin for the capital raise (which became an 800ish pin) and this week's slight dip to 900ish for the Thursday and Friday prep for options closing. With the upper bollinger band above 978 now, the stock is starting to get the headroom needed for a run to 1000 within the next two weeks if news and market conditions allow.

Looking at the weekly tech chart, the relentless climb becomes much more apparent when you remove the end of week mischief and regard the stock on a weekly basis. Notice the 11 weeks in a row of positive trading.

Where does TSLA go from here in the short term? We keep going up until we don't any longer. Calling that turn-around point is nearly impossible. Maybe we see a macro event at some point. In the meantime, I am holding long and strong at my optimal FOMO vs. FOF (fear of falling) level of risk. My weekly trades are small enough that when I eventually take a loss on one, that loss will pale in comparison to all the gains I've made with my previous weekly trades.

Over the long term, I suspect we'll see TSLA continuing to grow 50% per year with increasing profitability as it realizes economies of scale and all that R&D work done on solar roofs, Tesla Semi, Model Y, CyberTruck, and autopilot FSD starts producing results. The videos of Dave Lee are helpful for explaining my long-term Tesla plans.

For the medium term, I see S&P 500 inclusion, battery day revelations, plus mature Model 3 and Model Y production in Fremont and Shanghai giving boosts to the stock price in the second half of this year. One of our TMC members asked how I have confidence that TSLA will trade higher than now once S&P500 inclusion gets announced. No doubt S&P 500 inclusion will stimulate buying by big investment houses that sell index funds to their 401K participants. There will be a bump up from whatever the stock price is at the time of the announcement. The question then becomes, "what will the stock price be at the time of that news?" Obviously, if TSLA keeps climbing at 50 to 100 a week, the stock price could face a correction prior to the S&P500 reveal, and so nailing down a value for TSLA after the S&P 500 announcement is extremely difficult. When TSLA was trading below 800 I felt comfortable that S&P500 would yield a higher SP, but each week of growth makes that call more difficult. There are too many variables to consider. For now, though, I continue to believe that riding this stock up with plans to ride out short-term bumps makes for a reasonable investment strategy. With a lack of real competition on the horizon, TSLA looks so strong that I feel confident we'll be happy with the stock price a few years from now. I don't want to try calling the top because it's too easy to call it too low, which would cost you a not-so-small fortune if you jump out but can't jump back in with the same number of shares. And so I am in let-it-ride mode until I see some evidence that Tesla is running into demand or execution problems. So far, I don't see such things, but we must remain vigilant.

For the week, TSLA closed at 901.00, up 100.97 from last Friday's 800.03. Add in the 463.14 climb of the previous 10 weeks and we have an 11 week climb total of 564.11. That's an average rise of better than $55/wk. Not bad. Enjoy your weekend!

Conditions:
* Dow down 228 (0.78%)
* NASDAQ down 174 (1.79%)
* TSLA 901.00, up 1.59 (0.18%)
* TSLA volume 14.3M shares
* Oil 53.38
* Percent of TSLA selling tagged to shorts: 60%

 

[Papafox]

Over the weekend word came out that the coronavirus had made significant inroads to Italy and Iran. This news set the market to worrying, with both the Dow and NASDAQ down over 3.5%. Although Tesla news has been positive lately, there's a limit to how steeply the macros can descend before TSLA investors start worrying and selling themselves, and we crossed that threshold today.

Actually, the selling that affected the stock price was likely less by shareholders and more by call option holders. You can see that TSLA held its own until about 11am, as much as could have been expected under the macro pressure, but as TSLA began it's descent toward noon, we likely had some new shorting but more importantly we had selling by the market makers to work toward delta neutral as the stock price dipped today. That shorting was needed because some of the call options holders started selling (as you could read in the main TSLA investor's thread). Still, considering the size of the macro dip, TSLA volume of only about 15M shares was an impressively small number. In this post, @generalenthu suggests that the volume of TSLA today wasn't high enough to allow full delta-hedging (selling in this case) by market makers by end of market trading. Thus, we see the stock price continuing down in after hours trading, presumably because of market makers working towards getting neutral on TSLA. We saw just the opposite situation a week or so ago as low volume and high price rise led to market makers buying in after hours trading. Such is life with a volatile stock that has such a high percentage of the trading taking place in options.

Needless to say, the 100 shares I bought on Friday for the Monday morning buyer's exuberance were quite red when I woke with the chickens to see how the day was progressing. I closed that trade this morning at a little under 850 and accepted a loss.

In news, some Model Y buyers are receiving notices from Tesla that their Model Ys will be ready for delivery in March. I personally believe that Tesla has done a great job of keeping Model Y out of the limelight so as to avoid cutting too heavily into Model 3 sales.

Although our regular chart shows after-hours trading until 6pm, this NASDAQ chart above shows 2 more hours of trading. Overall, TSLA gained 10.21 in after-hours trading. Perhaps the market makers fulfilled their delta-hedging and their departure allowed the SP to rise. OTOH, maybe they only hedged until 6pm and figured volume would be too skinny for the final two hours. If so, they might have unfinished work tomorrow, but I do like the buying that brought TSLA up to 844 in the final 2 hours.

The NASDAQ had the flu today, starting low and staying low all day, to close down 3.71%. Notice substantial correlations between the TSLA chart and the NASDAQ chart.

It's been nearly a week since we've been at this level. The tech chart puts things in perspective.

Often, we see three down days in a row with bad macros before things improve. Tomorrow should be day three. Fingers crossed it's no longer than that.

Conditions:
* Dow down 1032 (3.56%)
* NASDAQ down 355 (3.71%)
* TSLA 833.79, down 67.21 (7.46%)
* TSLA volume 15.2M shares
* Oil 51.71
* Percent of TSLA selling tagged to shorts: 57.5%

 

[Papafox]

Today the market gave us a head fake in pre-market trading, suggesting that the market had eased up on its coronavirus worries. Alas, as the day progressed, the market sunk and so did TSLA as those worries returned. What's notable with TSLA are the deviations from the NASDAQ's trajectory. Both sank until the NASDAQ temporarily bottomed out about 11:20am, but TSLA's decline showed sharp icicles caused by large selling volumes, suggesting that the shorts who were entering positions this day were doing so in the most dramatic (and harmful fashion possible).

As the NASDAQ continued to sink in the afternoon, TSLA traded right around 800, sometimes rising above but always being pushed back below. I stated on the main thread that some entity wanted TSLA to close at least a few cents below 800 for the day (so as to maximize fear of falling) and for a while around 3:00pm it looked like that play was going to be snatched away as the macros rose. Unfortunately, we saw a noticeable dip after 3:10pm or so, and TSLA closed at 799.91, a mere 7 cents below 800.

If you look at the Opricot.com max pain chart, you'll see that the most important accumulation of calls to expire on Friday are at 900 strike and above. There's a mere 2.3K calls set to expire at 800 strike on Friday, so those 800 calls really can't be the reason for such a strong tug-of-war at the 800 price point. I think part of the play is to continue protecting the 900 and above strike call options, just in case the macros calm down and TSLA gets frisky again (as it is known to do).

In news, all systems appear go for Q1. The loading of European ships appears completed for the quarter, which would suggest turning to North America for the remainder of the quarter's deliveries. I saw a recent video of the factory, loaded with cars, and so we can dismiss rumors of significant supply chain disruptions. Here in Hawaii my neighbor has been waiting most the quarter for his Model 3 and has been told a delivery timeframe that lines up with the final 2 weeks of March, no surprise. There was no Model 3 in the Tesla showroom when I visited, as I assume it had been sold. I see no major issues with Q1 at the moment.

The NASDAQ opened in the green but sank to a close 2.77% down. For this reason, TSLA's close of down 4% isn't such a big dip when taken in the context of the NASDAQ

Dusaniwsky's graph suggests net shorting the last day or two but otherwise a continued process of short covering.

Looking at the tech chart, you can see that the stock price is still slightly above the mid bollinger band, and thus we haven't seen much downward pull on the upper bb yet. It still stands at a healthy 970.

Where does TSLA go from here? I believe that some relative strength this afternoon compared to the NASDAQ suggests that buyers are eager to re-enter the stock when it is perceived to have bottomed out, and some have possibly jumped the gun a bit. All eyes remain on the macros, however, because most investors don't want to be buying when the extent of this macro dip remains unclear. The good news is that eventually these worry dips of the macros go away, providing they're not being fueled with developing news that's worse than expected. As I mentioned yesterday, three days is a common time frame for this type of macro dip, and today was day three. My guess is that after this many days of declining prices, the allure of sale-priced stocks becomes too inviting, and investors re-enter the market. Hoping that 3 days is the magic number for this dip. We'll find out on Wednesday.

Conditions:
* Dow down 879 (3.15%)
* NASDAQ down 256 (2.77%)
* TSLA 799.91, down 33.88 (4.06%)
* TSLA volume 17.0M shares
* Oil 50.08
* Percent of TSLA selling tagged to shorts: 55%

 

[Papafox]

Please note that the NASDAQ chart above is gorked (NASDAQ didn't reset the end of previous day value), and the red/green line should have been at 799.91, which I've marked with a heavy black horizontal line. Nonetheless, it contains both pre-market and after-hours trading, which are both important today.

I knew something was up when I noticed how low TSLA was trading pre-market compared to the futures for the NASDAQ. I then checked pre-market for NVIDIA and Apple, and they too were down substantially, which suggested to me that we were seeing a dip that was more oriented toward tech-like stocks than TSLA specifically. Right after market open, TSLA rallied to briefly reach the green and did so again around noon when it reach a high of 813. Alas, a drop of the NASDAQ pressured TSLA to descend as well, and even though the NASDAQ bottomed out around 2pm, TSLA continued a descent into close and into after-hours trading. Naturally, the shorts would take advantage of any blood in the water to make things worse. The steep dip and recovery at 7:40am has shorty's fingerprints on it, and I expect that we saw net shorting this afternoon as shorts jumped aboard not so much as to manipulate and cover by day end but rather to increase their short position for a hoped-for ride down.

Were shareholders running for the exits? After a drop of over $21 for the day, I see that volume was a very moderate 13.8 million shares, which suggests otherwise. I think what happened is that after the NASDAQ began giving up its substantial gains in the afternoon, TSLA call option holders started getting nervous and started selling to harvest some of their substantial gains. As the dip increased, we saw more Put orders being placed with TSLA. The market makers had to make delta-hedge adjustments for the falling stock price and especially for activities in the TSLA options market today.

In retrospect, with so many open call options and so much of the price movement in past weeks being owed to market makers buying TSLA to hedge for all those call options appreciating and changing their delta as TSLA rose, the time would inevitably arrive when the run higher would take a break and we'd see a down week. This afternoon as the NASDAQ started to fade, a lot of call option holders decided this was likely that week and started selling.

Why was the NASDAQ so jumpy today and yesterday? I think there's a wide variation in attitudes toward coronavirus in the minds of investors at the moment. Some expect a worldwide pandemic that will make a significant dent in economic activity, and some don't. The nice recovery in the NASDAQ we saw this morning is typical following 3 days of dip, and more optimistic investors wanted back in to pick up some stocks that were on sale. Unfortunately, other investors took advantage of the elevated prices to make protective trimming on their holdings, and so the overall effect was a fade in the afternoon. We're certainly not through with coronavirus and there will be other ups and downs associated with this topic until the warmer spring months when the virus will naturally fade downward in a seasonal move before revitalizing next flu season.

The NASDAQ ran well into the green (nearly 2%) this morning before fading to a mere 0.17% gain by close.

Looking at the tech chart, you can see today's trading brought TSLA down to about the mid bollinger band, which has caused both the upper and lower bollinger bands to move inward.

What to expect with TSLA in the future? In the short run, a move which marks a possible short-term top to a dramatic run up generally generates additional selling of shorter-term call options, so don't be surprised if there's more weakness ahead. A really strong NASDAQ performance tomorrow might change that picture, but I don't see that as likely. In the longer run, Tesla as a company is looking strong, especially with Model Y deliveries beginning March 15th. At some point there will be a dramatic rebound in the stock price when investors return to buying, and so there's always risk in playing the dip. My DITM call options don't expire until mid 2021 or later, and for this reason the easy decision for me is to ride out this dip. The year 2020 still looks very strong for Tesla and so perspective is needed in your investment decisions.

Conditions:
* Dow down 124 (0.46%)
* NASDAQ up 15 (0.17%)
* TSLA 778.80, down 21.11 (2.64%)
* TSLA volume 13.8M shares
* Oil 48.08
* Percent of TSLA selling tagged to shorts: 51%

 

[Artful Dodger]

Were shareholders running for the exits? After a drop of over $21 for the day, I see that volume was a very moderate 13.8 million shares, which suggests otherwise.

Robinhood users would seem to agree with you, @Papafox Over 1,300 of them 'bought the dip' this morning, then only 445 sold the slump this afternoon. Retail investor sentiment remains strong.

Cheers!

 

[Papafox]

Today was the ugliest day so far of the macro coronavirus scare and TSLA once again multiplied the effect many times over. It's easy to be fooled by false bottoms, which we've seen on Tuesday, Wednesday, and today, so be careful. On Tuesday, TSLA opened in the green but then fell. On Wednesday, TSLA peaked at about noon, and today TSLA peaked at about 1pm.

What's important to keep in mind is that the combination of huge numbers of TSLA options outstanding and delta-hedging by the option sellers leads to extreme climbs and extreme descents. Once this stock turns around we get to enjoy the flip side, so keep that in mind.

TSLA's exceeding a 10% decline today set up the alternate uptick rule for short selling through close on Friday. The rule had little effect today because shorts weren't the ones causing the dip. It was more a matter of delta-hedging by the sellers of the options. The rule could potentially be useful tomorrow, however, because sometimes shorts are the instigators of dips to get the ball rolling. If macros turn green or moderate on Friday, the rule could indeed be helpful.

That said, the coronavirus scare will not be a single event and be gone. We'll see some up days for the market and then more down days when news turns unfavorable. My biggest recommendation is that if you plan to deploy dry powder, do so in stages. Nobody has the whole picture and can say with confidence where the bottom lies. For example, at some point when better testing becomes available in the U.S., we will likely see in upswing in cases in certain locales, and that news will produce more macro dips. You don't have to catch the exact bottom to profit from this dip. A series of small buys at various price points that could reasonably be the bottom is so much better an approach. I'd much rather deploy too little cash at the bottom then deploy all my dry powder and sit twiddling my thumbs while the stock price descends further.

How far does TSLA fall? At some point if TSLA keeps falling at this high multiple of NASDAQ declines, TSLA will become ridiculously underpriced and I suspect at that point we see the multiple changing as buyers get itchier to grab shares before a turnaround. We saw about a 2.8X multiple of TSLA dip to the NASDAQ dip today. Keep an eye on that number going forward. TSLA was trading more than twice the multiple of other tech stocks today and at some point that ratio has to change. At some price point I think you could even see a bounce of TSLA if the price of the stock becomes too distant from reality. Remember, there's no evidence that Tesla's future is going to be impacted more severely than other U.S. companies and yet the trading of TSLA is so out of sync with the realities of valuation. There is a bottom at some point because the current decline is too far removed from the reality of the company's value, with or without a worse than normal flu virus in the wild.

Taking a look at the trading chart, notice that several pre-arranged trades took place in after-hours. I suspect these trades involved market-makers who were still busy delta-hedging their sold calls after the bell had rung. Notice that once the pre-arranged trades ended, so did the push downward on the stock price.

Once again we saw significant correlation between the NASDAQ movements and those of TSLA. Perhaps the biggest exception was that TSLA didn't trend downward as steeply in the final 15 minutes of trading as the NASDAQ did. The NASDAQ closed down 4.61%. Other tech stocks showed noticeably lighter losses than TSLA.

Looking at the tech chart, you can see that the stock price is approaching the lower bollinger band that's at about 635. Let's see if macros moderate tomorrow whether the stock price will find support from the lower bb value. In some previous dips, the lower bb has been useful for defining a bottom. The counter-argument is that most of the previous dips were TSLA-specific in origin, not macro-caused. Thus, consider tomorrow's potential lower bollinger band support to be an experiment.

Here's just a quick reminder that nearly all of us have ridden in this rodeo before. We know how intense things can get on the way down, and we know that as long as Tesla is executing and demand remains strong, the company always bounces back and then some. Can't wait to get a month or more further towards the end of flu season so that we can get on with better things such as Tesla's outlook for 2020 and the much anticipated battery day. Better days lay ahead.

Conditions:
* Dow down 1191 (4.42%)
* NASDAQ down 414 (4.61%)
* TSLA 679.00, down 99.80 (12.81%)
* TSLA volume 23.6M shares
* Oil 47.09
* Percent of TSLA selling tagged to shorts: 49.2%

 

[Papafox]

I did a small leverage up today by selling 100 shares in my IRA and buying 2 400-strike Jan 2022 calls. My idea is to be careful in deploying assets since this coronavirus scare could drag on for another month and a half and we'll see additional ups and downs during that time. I'll be patient.

Although we could see a nice gap upward on Monday, the flip side is that weekends are a time when we can also hear negative news about the virus, so there's some time exposure to consider. I'm likely not playing the end of week game for a while and instead leveraging up slowly with time.

 

[Papafox]

Friday was an extremely volatile day for TSLA and the broader markets as investors asked the question, "Have we hit bottom yet?" When you compare TSLA trading to the NASDAQ's you see some correlations between the two, but you also see lots of dissimilarities.

One of the big questions I wanted answered is how effective the lower bollinger band would be as support. It rose from 635 Thursday to a bit above 640 on Friday and although the stock price descended at times below the lower bb, it managed to rise above that number in afternoon trading. Additionally, the stock price approached the 50 day moving average (see blue line on tech chart) and then bounced. Looking at the daily chart above, you could see what looks like a long icicle extending downward from a downward push that had no similarities with the NASDAQ. Yep, that's our friends the manipulators at work. So far my feeling is that the combination of the lower bollinger band and the 50 day moving average will be helpful as support, but if the macros tank, it won't be enough.

Fortunately, Fed Chairman Powell late in the day announced that coronavirus poses a risk to the U.S. economy and that the Feds will use their tools as appropriate to support the economy. Wall Street took this announcement positively, and the broader indexes zoomed higher in market trading's final 20 minutes. As I write on Saturday afternoon the NASDAQ futures are up nearly 2%. Another positive indication from Friday's trading is the volatility in an upward direction when things are looking good. At about 11:40am (see below) the NASDAQ peaked below the red/green line after a quick run higher. TSLA followed this NASDAQ rise (but with some time delay) and actually broke into the green a little before noon. Also note that even before the NASDAQ recovered, some stocks have already risen noticeably as bargain-hunters buy these stocks. NVDA closed up nearly 7% and ARKK over 2% on Friday.

Of particular interest is the end of the day. The NASDAQ didn't start its run higher from the Fed statement until about 3:40pm or so, but look at TSLA, which bottomed out around 3:10pm and had been rising for nearly half an hour before the Fed statement. I think this early rise into close was related to traders who wished to position themselves for any potential Monday morning rise plus short-sellers who were covering before the uncertainty of the weekend and potential Monday morning rise materialized. In the final minute of market-trading, 735K shares traded hands.

In after-hours trading, TSLA actually traded in the green for part of this time as all the negativity and manipulations of the trading day were erased.

The Dow closed down about 1.4%, but the NASDAQ closed up 0.01%, thanks to the Fed statement late in the day.

Did hedge funds have much to lose on Friday? Looking at this segment of the opricot.com max pain chart, the 600s were mostly dominated with puts (which market makers likely hedged) and it wasn't until 700 before we saw any calls of significant quantity. With hedge funds out of the picture for deep downward manipulations, it does make you wonder who was behind the significant 10:04am push downward.

The shortvolume.com chart shows that the percentage of selling by shorts this week was mostly in to 50%s, vs. last week's 60%s. Of particular interest are the charts and observations of @Artful Dodger regarding large instances of naked short selling this week.

Looking at the tech chart, the combination of the lower bollinger band (lower green) and the 50 day moving average (blue) likely provided support to today's trading. The white color to Friday's candle signifies that TSLA closed higher than it opened, which is a positive sign.

For the week, TSLA closed at 667.99, down 233.01 from last Friday's 901.00.

Where does TSLA go from here? NASDAQ futures suggest that Monday will be an up day, but news can change moods, so it's best to keep an eye on futures. I use this site by investing.com. We also knew that at some point coronavirus would hit the U.S. in a bigger way and there will be negativity associated with first deaths and locally-transmitted cases. These events transpired in Washington State just recently. We might as well get this negativity out of the way (it was inevitable). Expect news to get much worse in a relatively short period of time. Again, I suggest slow buys on dips to deploy your dry powder to gain shares at attractive prices but leave yourself the ability to pick up more at even lower prices. The road to market recovery from coronavirus will almost certainly be lumpy.

There's much to support TSLA's stock price recovery. We've already seen how volatile in an upward direction TSLA can be when there's a hint of good news from macros. I suggest checking out this twitter post by Gary Black, someone with an impressive background. Basically, he's saying that Model Y expands Tesla's offerings dramatically from 25% of the addressable market to 66% with Model Y. Read the posts on his main page and you'll see his reasons for believing that TSLA has a long way to climb, due to valuations based on 2021 earnings. Anecdotal evidence of Model Y being sold out through the end of the year supports a view of massive demand for this vehicle. If the world economy slows a bit due to the virus, demand is normally a problem for automakers. With Model Y in the mix, however, TSLA may find that production will continue to be the determinate of sales for quite a ways into the foreseeable future. The fact that there is no standard range Model Ys being made available this year should reduce negative impact on Model 3 sales, due to significant differences in price. Meanwhile, photos are surfacing of Model Ys in the parking lot of the Fremont factory as the pending arrival of Y becomes very real for us Tesla watchers.

Have a great weekend.

Conditions:
* Dow down 357 (1.39%)
* NASDAQ up 1 (0.01%)
* TSLA 667.99, down 11.01 (1.62%)
* TSLA volume 22.9M shares
* Oil 44.76
* Percent of TSLA selling tagged to shorts: 52.1%

 

[Papafox]

TSLA at 750 anyone? Yep, after hours brought us that high and higher.

Trying to predict NASDAQ futures this weekend was a challenge. They started off up 2% going into the weekend, dropped to down 1.5% on Sunday, and then barely crept into the green around open. But oh what a day the macros had in store for us.

If you compare the opening of TSLA vs. the NASDAQ, it's clear that TSLA had much more buying pressure than the NAS. In fact, the NASDAQ even dipped slightly into the negative between 10am and 11am but TSLA clearly did not. I attribute TSLA's strength today to the dramatic difference in how quickly it fell last week when compared to the macros. TSLA investors who jumped ship last week were not fleeing the stock permanently, they were just getting out to wait for the bounce. Once it became clear the bounce was underway, the climb took off because many people wanted to get back into TSLA if it had bottomed out.

What's interesting is to see that for a $75 climb during market hours we saw "only" 20M shares volume. I attribute the relatively low volume to the new character of TSLA's longs, they're not inclined to sell at these prices, even on a big up day. Notice how the climbing continued relentlessly into close and beyond. I suspect that market makers were working hard to buy sufficiently to become delta neutral and that buying out of necessity extended into after-hours.

We have seen TSLA trading at a multiple of up to 2.8 greater than the NASDAQ during last week's downward slide. For much of today, TSLA was trading at over 3X the NASDAQ gains, but the final spurt of the macros during the closing hour was not matched by TSLA. Such a strong climb by TSLA today relative to the macros and its returning to an after-hours price of over $750 really pours water on the theory that TSLA is going to run all the way down to the Adam Jonas target of $500 and then some. Remove that fear and the upside becomes apparent.

In news, there have been discussions in the main thread about this post in Electrek which quotes a Tesla source as saying, "...sources familiar with Tesla’s US sales told Electrek that the automaker’s management has given its North American sales team roughly the same delivery goal as the previous quarter." With China deliveries to be up in Q1 as well as deliveries in some other locales, that is very encouraging news regarding Tesla's performance in Q1.


Also, this picture of Model Ys accumulating in the Fremont parking lot (originally posted by @Artful Dodger) indicate that more than a few dozen of the vehicles are going to be delivered in Q1. These are exciting times. "Ring, ring", excuse me for a second, it's the TSLAQ hotline ringing. This doesn't happen very often. "Yes, yes, I see..., okay I'm pass word along." TSLAQ just straightened me out about the Ys in the Fremont parking lot. They say the Ys are there because there's no demand for them and they need to be parked somewhere. /s

The NASDAQ finished up 4.49% today, a bit lower than the Dow's 5.09% climb. Both indexes rose tremendously in the final hour.

These days Dusaniwsky's projections need to be taken with a grain of salt, but he is suggesting that shorts were covering quickly during the big dip of last week.

Here's a really interesting development: percent of selling by shorts rose to 62.4% today. Normally on a big up day, shorts get out of the way because the stock is such a steamroller and cannot be stopped when volume is high. Nonetheless, 62.4% is a very high number and suggests substantial efforts to manipulate the stock.

Looking at the tech chart, you can see the upper bollinger band is way up at 931 and gives plenty of headroom if this rally wants to continue. Compare today's volume to the previous days. For such a big move, it's not much of a jump in volume.

Where do we go from here? I'm starting to think that the market's recovery from the virus scare might be less lumpy than I originally expected, or at least TSLA's recovery during this time period. Now that the macros plunged and weak retail investors of many stocks jumped ship, the pros are apparently jumping in and scooping up the bargain-priced stocks. The new owners of the stocks would be less resilient to fear-based selling based upon the virus than those who just parted with the shares. In a few days we'll get a better view of the much greater than reported instances of the virus's penetration into Washington State and elsewhere. Originally I thought the reality of the virus in the U.S. in high numbers would create a sizeable dip, but now I'm not so sure. The lethality of the virus is proving far less in countries such as South Korea than the estimates that came out of China. We should be getting a taste of public reaction to the higher numbers this week, but although I consider the possibility of another dip, I no longer am holding my breath that it's going to happen.

Now, look at Tesla vs. the macros and I think you will agree that today's rise has given a lot of potential buyers a fright that they might miss the big TSLA dip, which would encourage buying despite new negative virus news. In other words, today's dramatic price increase of TSLA likely has changed the psychology of investors to less fearful of falling and more fearful of missing out. We'll soon find out.

Conditions:
* Dow up 1294 (5.09%)
* NASDAQ up 385 (4.49%)
* TSLA 743.62, up 75.63 (11.34%)
* TSLA volume 20.2M shares
* Oil 48.32
* Percent of TSLA selling tagged to shorts: 62.4%

 

[Papafox]

Pre-market trading hours saw TSLA rise to as high as $821 as investors on the sidelines with FOMO sought to get back into the stock. Alas, the broader markets dropped by nearly 3% during the day, despite the Feds confirming a 1/2% rate cut was coming this month. TSLA mostly followed the ups and down of the NASDAQ but stayed considerably above the market and actually managed to close in the green. Many stocks continued to fall in after-hours trading and TSLA shed $18 by 6pm. Nonetheless, TSLA's strength compared to the broader markets today was impressive.

Besides FOMO from yesterday, the other catalyst for TSLA's jump this morning was when JMP Securities raised its TSLA price target to $1060. What's impressive about this target is that it's based upon 2021 earnings, with a 10% discount.

Looking at my predictions from yesterday, I think I batted 500. My hopes of little "lumpiness" to the market's coronavirus fears was proven incorrect by today's deep macro dip. More fretting is likely to come. OTOH, I believe that TSLA investors have a change in their psychology after many investors feared missing a reasonably-price re-entry to the stock after sitting out some of the market turbulence. Instead of TSLA falling at a 2X-3X multiple to the NASDAQ, TSLA closed today in market trading about 3% above the NASDAQ. I think the scare of TSLA running so high so quickly plus price target increases such as the JMP Securities note gives investors a substantial nudge in terms of Fear of Falling (FOF) vs. Fear of Missing Out (FOMO). We'll see other dips of TSLA during the coronavirus progression, but I don't expect the 2X-3X multiples of the NASDAQ any more. Investors know this stock is going back up at some point this year. What I'm curious about is how time will diminish the high FOMO that is evident today. It will subside, but how quickly? In the meantime, at times when TSLA turns higher, it may do with great volatility since many investors don't want to repeat their mistakes and lose the ability to buy TSLA at attractive prices.

One of the positive turning points in the macro battle may well be when therapeudics such as Gilead's Remdesivir are proven to be significantly helpful in treating coronavirus and a timetable is released for wide distribution of such drugs. By April we should get a look at Remdesivir's effectiveness in various Asian tests.

Both the Dow and NASDAQ closed down nearly 3%, with the NASDAQ finishing down 2.99%

Looking at the tech chart, the stock price made it above the mid-bollinger band today before losing ground.

Super Tuesday results will likely affect the market on Wednesday. Futures are up this evening, but they do change quickly.

Conditions:
* Dow down 786 (2.94%)
* NASDAQ down 268 (2.99%)
* TSLA 745.51, up 1.89 (0.25%)
* TSLA volume 25.3M shares
* Oil 47.42
* Percent of TSLA selling tagged to shorts: 60.6%

 

[Papafox]

Let me say this up front: someone was manipulating the "sugar" out of TSLA today.

Take a look at pre-market trading. This is appropriate if not low for a volatile stock on a day when the macros open high and then climb even higher. If you look at the pre-market trading, there looks to be an initial manipulative dip at 8am, a hold around 770, and then a big pushdown shortly before market open to bring TSLA into the red momentarily with about 8 minutes of opening.

This aggressive Mandatory Morning Dip accomplished 3 things. First, it's much easier to hold a price in market trading than push it down. Second, such a quick push downward gets people scratching their heads and wondering what is wrong with TSLA today? The fact that GM was having an EV day could be used as an excuse for the push downward, but it certainly is not an explanation. Thirdly, by pushing TSLA down and holding it down on a big macro up day, the manipulators send a message to traders that you are better off trading somewhere else today because TSLA is going nowhere (which is what happened and which most traders likely did).

I would characterize today as a huge pushdown at open and then a game of whack-the-mole that carried on throughout the remainder of the day. Keep in mind, dear investors, that we are not playing in an honest casino. The good news is that TSLA will eventually rise to the price it's worth. The bad news is that we have days like this when the manipulators win.

If I were to guess, I would suppose that some hedge fund that is too heavy in TSLA short postions has sold a bunch of 750 calls that expire on Friday and it is doing everything in its power to keep the close below 750 this Friday.

News today included a rather nap-inducing presentation at GM on EV day

The macros soared today with the Dow up 4.53% and the NASDAQ up 3.85%

With new features released for FSD later this month, additional revenue will be realized by Tesla. Add this additional revenue to the likelihood of over 100K deliveries in Q1 and possible FCA money coming in, and there's the possibility of a positive surprise for Q1 that could send the stock price higher. OTOH, the number of Coronavirus cases in the U.S. are greatly under-reported due to a lack of testing, and we will likely see a market reaction when the reality of the situation comes into better focus. Thus, there's a huge range of possibilities for the stock in the short to middle run and the safer bet continues to be longer-term plays with TSLA.

Check out yet another day with percent of selling by shorts above 60%, which indicates LOTS of manipulations.

Conditions:
* Dow up 1175 (4.53%)
* NASDAQ up 334 (3.85%)
* TSLA 749.50, up 3.99 (0.54%)
* TSLA volume 15.1M shares
* Oil 47.44
* Percent of TSLA selling tagged to shorts: 60.4%

 

[Papafox]

Yep, the lumpiness of the macros is a real thing and we'll see more. Nonetheless, TSLA is not trading at a large multiple to the macros, and neither are many tech stocks that I follow. Someone on Twitter today said, "This is a time when you're afraid to be in the market and also afraid to be out of it." Notice how closely TSLA responded to the NASDAQ's gyrations today. It's a volatile time which, unfortunately, works well for manipulations.

In news, Rob Mauer's Youtube Podcast does a very good job of summarizing the GM EV day presentation. Overall, there's little for Tesla to fear from GM's announcement, and a look at GM's presentation sheds additional skepticism on the claims of certain media outlets that the presentation was the reason for yesterday's subpar performance of TSLA.
Also...
South China Morning Post story of Shanghai pulling out all the stops to help Tesla gives a good idea of how supportive the local government is in helping Tesla meet its goals in 2020.

The Dow closed down 3.58% and the NASDAQ was down 3.10% today with TSLA closely following the moves of the NASDAQ

Looking at the tech chart, you can see the upper and lower bollinger bands have constricted considerably and they're now both drifting a bit lower. The biggest surprise of the tech chart today was the relatively tiny volume of only 10.9M shares traded. When the volume is low on a day with such a big move downward by the macros, it speaks of buyers wanting a good deal, but it also speaks of a lack of sellers, which is bullish.

Positive thoughts for the day:
* It's a great year to build the Berlin gigafactory. By the time it's done, the coronavirus will be less a threat
* Model Y launching right now could be the best insurance policy possible for keeping Tesla sales high throughout the year. Much depends, of course, for Tesla to shift resources from Model 3 to Y if demand shifts too noticeably in that direction.

Conditions:
* Dow down 970 (3.58%)
* NASDAQ down 279 (3.10%)
* TSLA 724.54, down 24.96 (3.33%)
* TSLA volume 10.9M shares
* Oil 45.56
* Percent of TSLA selling tagged to shorts: 56.3%

 

[Papafox]

Friday was a day with macro weakness. It was also options expiration day, and when comparing the NASDAQ chart (below) to the TSLA chart, you can see significant variations between the two, even though news about Tesla was positive.

Take a look at 7:57am when TSLA was trading down about 6%. That was quite a bit more than the NASDAQ (using QQQ for reference) was down at the time and looked like a standard manipulative push down in pre-market trading on options expiration Friday. TSLA started to recover, it was capped for a while in pre-market, dipped right before open and then rose with market open on substantial volume.

OTOH, in the afternoon when the NASDAQ was dipping from 1:30pm until about 3:15pm, TSLA was mostly holding its own. When the macros started rising rapidly in the final 45 minutes of market trading, TSLA rose at a slower rate due to likely manipulations and closed with a bigger loss than either the Dow or the NASDAQ. I often look at TSLA prices on Fridays as a work of fiction.

I'm thinking pushing down in pre-market so that TSLA opens at an artificially low price can be a profitable manipulation. Volume is typically so light in pre-market that lots of downward movement can be bought for the dollar. Should the lower price hold once market trading begins, market makers will need to start selling to delta-hedge the substantial number of options they have previously sold, and thus the market makers are inadvertently continuing the downward pressure that the manipulators started pre-market (at a discount).

News on Friday and Saturday was positive and included:
* News that China has approved the sale of China-made Long Range Model 3s (will help bring down costs to buyers through tariff elimination and also China subsidy applying to these more expensive Model 3s)
* Model Y delivery to take place earlier than expected, on March 11 in California

Both the Dow and NASDAQ experienced a strong final 45 minutes, with the Dow closing down 0.98% and the NASDAQ down 1.87%

You can see that on the opricot.com max pain chart for Friday, 700 was the most active call strike for trading, even though the total number of 700-strike calls expiring was fairly low.

Looking at the tech chart, you can see that the past two days of negative trading have had low volumes and suggests most TSLA investors are in HODL mode. The lower bollinger band stands at 646, which might come in handy should there be a big macro worry next week. During the previous week's dip, we saw a bounce off the 50 day moving average (shown in blue), which is now about 641.

For the week, TSLA closed at 703.48, up 35.49 from last Friday's 667.99.With all the craziness of the past couple days, it's nice to see TSLA gain 35 for the week. This gain shows two sides of the TSLA story at the moment. On the one hand, the virus is making inroads in the United States and once readily-available testing appears the numbers will increase dramatically. Don't be surprised to see more lumpiness in next week's macros. On the other hand, this Motley Fool article entitled "11 Reasons to Buy Tesla and Never Sell" explains what others are noticing: Tesla has a great future and this is a stock you want to own. It's all a matter of investors playing the dip game, expecting to buy TSLA at a better price at some point in the future when the markets are most afraid of the virus. We saw earlier this week how quickly TSLA could bounce back from a dip, and consequently many investors are watching TSLA like a hawk and will jump back in when the perception of a market bottom is reached. It's possible, however, that TSLA and some other popular stocks could see their recoveries begin before the rest of the market, so if you are trying to pick up additional shares, it's best to watch carefully, be patient as the bad news of the virus comes in, and spread out your buying rather than expecting to catch the perfect buy price.

Have a good weekend.

Conditions:
* Dow down 257 (0.98%)
* NASDAQ down 163 (1.87%)
* TSLA 703.48, down 21.06 (2.91%)
* TSLA volume 12.4M shares
* Oil 41.28
* Percent of TSLA selling tagged to shorts: 57.6%

 

[Papafox]

As the weekend wound down, we learned that on top of the virus fears, Russia and Saudi Arabia managed to get the world into an oil price war. According to this article in oilprice.com, on Friday Russia failed to cooperate with a move to decrease oil production and so Saudi Arabia responded with a huge price cut. How long this oil price war lasts, nobody knows.

The result of the double-jeopardy was a market that lost more in a day (percentage basis) than any day since the 2008 days, but of course the severity of the situation is more benign this time around. TSLA neared $600/share in pre-market trading but the stock rallied not long after open (in harmony with a NASDAQ rally) and exceeded $660 at 10:15am and then began a long downhill run, once again taking its cues from the broader markets.

For such an enormous move, TSLA's volume was only 16.4M shares today, suggesting that the market makers likely had to work into early after-hours trading in order to complete their delta-hedging. Such low volume on such a volatile day also suggests most TSLA investors remain in HODL mode.

The Dow closed down 7.79% today, with the NASDAQ down 7.29%

The QQQ, which includes NASDAQ 100 stocks, gained 2.30% in late after-hours trading in response to words from Trump that financial policies are coming to stop the financial mayhem. He mentioned major announce on Tuesday (this is an election year, after all).

TSLA responded to the strong NASDAQ after-hours jump by running up by nearly 2X that amount, or 4.57%

Looking at the tech chart, the lower bollinger band did a respectable job today as support at the 619 level but the SP nonetheless managed to dip to 608. My guess is that market-makers who are busy delta-hedging are not going to be worried about the bollinger band while they're frantically selling to get delta-neutral.

I continue to focus on the attractive long-term prospects for TSLA and am only holding stocks and leaps. I did buy a couple leaps today to be consistent with my slow-buy plan on dips as this drama plays out.

Keep in mind that TSLA can run uphill very quickly on good news. Also, remember the most recent intervention by the feds produced a nice rally, but it was short-lived. Beware of false recoveries, but also beware of inappropriate levels of doom and gloom. Lets see what is proposed tomorrow and put it in the context of how it might affect Tesla sales in Q2.

Conditions:
* Dow down 2014 (7.79%)
* NASDAQ down 625 (7.29%)
* TSLA 608.00, down 95.48 (13.57%)
* TSLA volume 16.4M shares
* Oil 30.23
* Percent of TSLA selling tagged to shorts: 58.8%

 

[Papafox]

Today's strong pre-market run up was the result of Trump mentioning that stimulus will be explored to cushion the effects upon the economy of the coronavirus. As with other stimulus efforts, the market typically shrugs after a day or two and goes back to fretting about coronavirus. I don't suspect we'll see bottom until testing kits are readily available, containment efforts are underway, and the U.S. has come to terms with the disruption the virus will create in the short term. Nonetheless, the POTUS being very focused on protecting businesses and therefore the markets during this crisis is a big plus to many investors and will likely reduce the size of the dip.

Looking at other tech stocks, I saw high pre-market for them, too, and then a decline, though not as pronounced as for TSLA. For much of the day day TSLA traded at a 2X multiple to the NASDAQ. What really caught my attention, though, was trading between 2:20pm and close. The NASDAQ started climbing like a hot air balloon with ballast thrown overboard, but TSLA just leveled out in the 640s. I see no news that would put the kibosh on TSLA and I attribute the weak afternoon trading to capping put on by a party intent on manipulating this stock. In the end, TSLA always eventually reaches a fair price when a big rally overpowers the manipulations, but the effects can indeed be felt for months sometimes, so this is one reason why I shy away from short-term bets with this stock.

In late afternoon Tweets, Elon says he's looking for a location in the Central U.S. for a Cybertruck and Model Y factory. Such positive focus on growth is helpful to counter nearer-term concerns. Also, Tesla once again ran away with the Consumer Reports owner satisfaction survey.

I don't mind making some small buys in the low 600s on dips because I have conviction that TSLA will be heading back to the 900s and above once the virus has peaked in the U.S., the market has calmed down, and Tesla is busy growing and turning profits again. Once TSLA is above 1000, it doesn't matter too much weather I bought in the low 600s or the high 500s. Calling a bottom is tough, and so I hedge my bet by picking up some shares or leaps during local lows, leaving most of my dry powder for later. With the rest of my TSLA holdings, I am HODL. I do not need to access my shares and leaps for funds within the next two years, and so this approach makes sense for me (but certainly not everyone).

The broader markets rallied today, with the NASDAQ closing up 4.95%. If Tesla had maintained its 2X response to the NASDAQ it would have closed up nearly 10%.

Percent of selling by shorts continues its elevated status in March with 60.5% of selling tagged to TSLA shorts. Such high numbers suggest lots of manipulations and back up the manipulation explanation for Tesla's weak end of day trading.

Looking at the Tech Chart, the SP has climbed back to the 50 day moving average and above the lower bollinger band. With the lower bb already bending down, it'll be less useful as support this time around, however.

Overall, announcements about looking for locations for the next gigafactory remind us of a very positive future for this company. We just need to work through the turbulence of the near term before starting our climb to the much better ride we'll find at the higher altitudes.

Conditions:
* Dow up 1167 (4.89%)
* NASDAQ up 394 (4.95%)
* TSLA 645.33, up 37.33 (6.14%)
* TSLA volume 15.3M shares
* Oil 34.13
* Percent of TSLA selling tagged to shorts: 60.5%

 

[Papafox]

Just a note that I found Rob Maurer's YouTube podcast very useful regarding the production implications of Tesla's 1 millionth vehicle coming off the line.
Check it out here

 

[Papafox]

Today the Dow was down nearly 6% and the NASDAQ closed down 4.7%. TSLA defied the pull of the macros and actually ran into the green for market open. TSLA rallied again on a slight run higher by the NASDAQ after noon and briefly went green again. Naturally, our friends the shorts wouldn't let an afternoon go by without testing to see how far the stock could be pushed down and about 2:35pm and again about 3:15pm we saw the deep dips of manipulative selling and almost immediate recoveries. These two dips both failed to get TSLA below 610 and with a double-bottom buyers saw an opportunity and TSLA sailed above 638 before closing a few dollars lower at a mere 1.72% drop for the day. It was an impressive show of strength on one ugly macro day.

Why the strength? Perhaps the early deliveries of Model Y and the registration of a large number of VIN numbers suggests the Model Y ramp will be much quicker than expected. Also, Elon's Tweet about the production of the one millionth Tesla may have reassured some investors that Q1 production was on track.

So where does this strong performance today leave us? The best case scenario is that a big institutional investor has begun acquiring shares prior to Q1 P&D report and ER. If there was lots of buying, however, volume would likely have been higher than the 13.4 million shares. The best case scenario would suggest that TSLA may be ready to recover or at least start holding its own before the broader markets.

The worst case scenario is that as the virus situation becomes worse in the U.S., the broader markets continue to fall and drag TSLA lower with them.

The reasonable middle ground is something in between as TSLA shows additional days when it outperforms the broader markets but still has a battle to fight for the next month as the macros continue to be weak. During these really down days for the macros this week, TSLA volume has stayed low, suggesting that investors are prepared to ride this pandemic out. Consider the progress that has been made. When the macro dips began, TSLA was trading down up to 2.8X the NASDAQ's decline. As we progressed forward, TSLA moderated to 2X and then more like a 1.25X yesterday. Today's strong outperform of the macros by TSLA continues that trend. Let's see what happens tomorrow.

The NASDAQ lost ground most of the day and closed down 4.7%

Shorts were tagged with 50.6% of TSLA selling today

Looking at Dusaniwsky's chart, you can see that shorts reversed the covering trend and have been net shorting this week, likely in hopes of riding the bad macros down with TSLA short positions. For TSLA to show continued resilience to macro push downs while shorts are increasing their positions says something positive about the strength of TSLA.

Looking at the technical chart, TSLA has settled this week in the 630ish region where it bounced during the previous big dip.

Trump's address tonight set the futures on a downward path, so buckle up the seatbelts and hang on. Fingers crossed that TSLA again shows strong resilience to the dip.

Conditions:
* Dow down 1465 (5.86%)
* NASDAQ down 392 (4.70%)
* TSLA 634.23, down 11.10 (1.72%)
* TSLA volume 13.4M shares
* Oil 30.84
* Percent of TSLA selling tagged to shorts: 50.6%

 

[Papafox]

Today's drop of the macros was one for the record books. We saw the 15 minute pause at down 7% and of course when TSLA lost 10% the alternate uptick rule went into effect for the rest of today and for Friday. Below I've posted an image of the QQQ to compare with TSLA.

The QQQ is a subset of the NASDAQ and I include its chart so you can get a reasonable comparison between TSLA and QQQ including pre-market, market, and after-hours trading. What I say here can be seen in the actual NASDAQ chart below. You can see the very clear relationship between TSLA and the NASDAQ (QQQ too) through about 2pm. The big rise about 1pm was the Feds announcing a stimulus, followed by selling to take advantage of that rise. After 2pm, TSLA pretty much traded horizontally while the NASDAQ (and QQQ) continued to descend, including a steep descent into close. One possible explanation for the horizontal trading of TSLA near 560 is a big buyer backing the truck up and accumulating shares at this price level. This theory is consistent with what we saw on Wednesday as TSLA outperformed the broader markets.

The NASDAQ closed down 9.43%, with a sharp dip right before close

Considering that TSLA closed down more than 73 during market hours, volume of 18.9 million was somewhat on the light side. With the Dow losing nearly 10% and the NASDAQ not much less, TSLA's 11.62% drop was about as good as we could have expected. That's a multiple of only about 1.2X compared to the broader markets.

We did see the QQQ and other stocks continue their dips into after-hours. Likely part of the dip was investors responding to margin calls.

So, what do you do? This post by @avoigt was one of the best overviews of what's going on, IMO. I highly recommend a look.

Will the markets recover from the dreaded coronavirus in due course? Yes, they certainly will, which makes the current overreaction a buying opportunity if you have dry powder and time it right. Again, I suggest small buys spread apart because it truly is tough to call the bottom. TSLA will come out of this dip with plenty of money in the bank and lots of interest in its products, so if you're holding, you'll be rewarded in time.

Looking at the tech chart, today's pause of TSLA right on the lower bollinger band may be coincidence, or the band may have been the buying target for the entity accumulating today. As a general rule, once the bollinger band, upper or lower, has a steep slope to it, I tend to discount its value as support or resistance.

Conditions:
* Dow down 2353 (9.99%)
* NASDAQ down 750 (9.43%)
* TSLA 560.55, down 73.68 (11.62%)
* TSLA volume 18.9M shares
* Oil 31.06
* Percent of TSLA selling tagged to shorts: 39.6%

 

[Papafox]

Friday's extreme volatility tells a story of manipulations and human nature. In pre-market trading, TSLA ran above 600 and was up 8%. I am using the QQQ chart below as a surrogate for the NASDAQ because of the ability to show both pre-market and after-hours trading in a direct comparison between two charts. QQQ was up about 6% pre-market and then lost about half that amount by 10am. In contrast, TSLA lost all 8% and a little more during those 30 minutes.

Why such a fall? Consider that this was options-close Friday and most Fridays, both on the way up and on the way down, trade negatively as manipulations are aplenty on options close day. I think today's manipulators started selling like the mischief shortly after open when the NASDAQ showed weakness. The NASDAQ dip started to moderate 12 minutes after open, but TSLA had lost almost all that 8% in that short span of time. Thus you first see a NASDAQ dip, then it is put on steroids by manipulative selling (not necessarily short-selling), which is picked up by algos that start selling too. All of this gets TSLA longs worried and thinking "I've got to sell quickly to protect my gains today", which of course only accentuated the dip. Traders also jump ship from TSLA and take their money elsewhere. If there's one thing I've learned from trading TSLA all these years, FUD and manipulations work best when there's ambiguity and uncertainty. TSLA longs are tired of the drops and today's quick drop right after opening pushed some to sell as a stress reliever. A year ago, selling over 500 sounded pretty good, so I think that TSLA's high price relative to last year puts additional selling pressure on the stock that some other stocks don't have to deal with.

Anyway, the broader markets like the message delivered near market close by the POTUS, and both the Dow and NASDAQ closed more than 9% higher today. TSLA closed down 2.49%, for a difference of nearly 12% between the two. This was on a day with no apparent bad news for TSLA and the day when the product that will lead Tesla into a brilliant future, the Model Y, began deliveries. To attribute such a disparity between TSLA and the rest of the market to coronavirus fears is ludicrous. Remember, it's easier to cap a rising stock on low volume than it is to push it way down. Today was a perfect setup for manipulations.

Shouldn't the Alternative Uptick Rule have prevented such a capping exercise today? The rule has some value for preventing push-downs, but for capping, you can short to your heart's content on the uptick, which is what I think happened. The idea is that such behavior greatly reduces TSLA's performance on strong macro days. Today was a perfect setup for such a manipulation.

In previous times, we've been able to identify the prices which the hedge funds were driving TSLA down to for options close Friday. Such prices are no longer obvious, and I suspect the manipulators have morphed into entities that may be protected bought puts as well as sold calls and short positions.

The NASDAQ closed up 9.35% today, with most of the gains in the final 25 minutes of market trading

Shorts were tagged with selling 40.1% of TSLA shares today. Normally, such low numbers would indicate a lack of manipulations, but I've seen several examples over the years when the most flagrant manipulations took place with low percentage of selling by shorts numbers. I think on such days, the manipulators seek out non-FINRA sources for their short shares to disguise their work.

Looking at the tech chart, you can see that the opening and closing values for TSLA managed to stay above the lower bollinger band, but intra-day trading was oblivious to the lower bb.

Okay, come over here into Papafox's office for a moment, we need to chat. There are those dark moments early in the morning when it's easy to say, "I think I'll sell a chunk of my TSLA and buy it back when this coronavirus macro craziness is over." It's human nature because it doesn't feel good when you look at your phone app and see the red. Let me tell you about the flip side of that decision, however.

As people sell TSLA on days like today, who is buying those shares? I know a very intelligent fellow who sold all his TSLA at 800 and is now buying it back in bits. To him I say, "well played" and hold no grudge. He suspects that TSLA is going to be valued at over 1000 next year and will be rising 50% or so every year for the foreseeable future. Is he going to sell his shares to you for 650, 750, or 850 when it starts rising? Probably not, he's going to hold for the long run. My brother traded TSLA years ago, quit doing so because the dips were too painful, but changed his mind recently when he saw my success and understood that Tesla is here for the long run. He's buying back in after years away, bit by bit. Several friends have started accumulating TSLA too. How about the clients of Adam Jonas? He's recently lowered his price target to 480 to make it easier for them to pick up cheap shares. What all these people have in common is that they're buying TSLA for the long run. They won't be selling their shares to you for a $100 profit. That's chump change compared to what lies ahead. When the all clear siren sounds and TSLA starts running higher, it's not impossible that we could see a $200 up day. This stock is a bargain in the 500s and it would be an absolute steal in the high 400s.

What you need to understand is that if you sell TSLA now it may indeed dip further, but when it does turn around, the volatility on the way up could be breathtaking. At current prices, there are far more people who want to own TSLA than there are shares to go around once the coronavirus clouds part. When the stock starts rising, though, not everyone is going to be able to get in at reasonable prices. You feel bad now? Imagine how you'd feel if TSLA takes off and you can't buy back in at anywhere near the price you sold.

Here's another perspective. The coronavirus situation is going to be around for months at a minimum. The macros will be mighty lumpy during that time. Is TSLA going to just keep falling like it's done this week? I suggest that the coronavirus situation will peak in the U.S. later this spring or during early summer. There will be relief at some point when the fear subsides. We TSLA veterans have been through far worse dips than this, and the company's prospect at the moment look far brighter than ever before, especially with $8 billion in the bank.

If you believe Tesla has a brilliant future, then at some point it begins climbing again to realize that future. To get to that point where the stock price is rising and the fear is subsiding, you must first endure more of those mornings when the stock app on your phone shows red yet again. Your reward is owning the current number of shares you hold when the stock turns around, starts climbing, and investors are outbidding each other to get back in. To me, being caught too low in my TSLA holdings when the stock rebounds and climbs like a Falcon 9 heavy would be an even worse feeling. I've waited too long to enjoy owning TSLA during its profitable growth years and I don't wish to risk missing that opportunity. I added 1 leap when we were trading around 510 today.

For the week, TSLA closed at 546.62, down 156.86 from last Friday's 703.48. It's been a tough week, my friends. Please find a chance to de-stress this weekend. Exercise does it for me. Have a great weekend.

Conditions:
* Dow up 1985 (up 9.36%)
* NASDAQ up 673 (9.35%)
* TSLA 546.62, down 13.93 (2.49%)
* TSLA volume 22.6M shares
* Oil 31.73
* Percent of TSLA selling tagged to shorts: 40.1%

 

[mikemillar]

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I don't wish to risk missing that opportunity. I added 1 leap when we were trading around 510 today.

Me too! I bought my main holding in June (my first direct single share investment, as a long term hold) and I'm happy to keep until TSLA really takes off. But this drop is too good to miss - "......be greedy when the market is fearful....". I made a small buy Thursday and another Friday. Thanks for your fascinating insight into the complexities of the market, Papafox. It puts the volatility into clear perspective.