TSLA chart above
QQQ chart above
On Tuesday, 1Q24 delivery numbers came in lower than expected at 386,810, and noticeably below 1Q23's deliveries of 422,875. The day got off to a rocky start with the macros well in the red. Even after the sizable recovery shown by QQQ above, Nasdaq closed down 0.95%. In contrast, TSLA closed down 4.90%. If you consider TSLA's beta of over 2 and Nasdaq dropping 1%, then about 2% of TSLA's drop could be considered macro related and the other 3% was news related. For delivery numbers falling well below forecasts, that's an amazingly minor dip. I have a few thoughts about why.
Most importantly, you have buyers who see FSD on track to become reality, which will lead to Tesla entering the insanely lucrative robotaxi market. Cathy Woods' ARK funds were buying TSLA with abandon. Volume was up, at 116M shares, but the buyers balanced out the sellers at about $165/share and a little higher as the day came to an end.
Perhaps the normal effort to push TSLA lower following a P&D report or ER was missing this time, you might think. Well... percent of selling by shorts leaped up to 60% on Tuesday, with a hearty 6.8 million shares trading during the 4pm closing cross. Looks pretty evident that the effort to push TSLA lower was indeed there but buyers kept materializing in the mid 160s. Despite the mainstream media being tight-lipped as possible about the implications of FSD v12.3, word got out and I believe a large percentage of Monday's buyers were scooping up shares with FSD success on their minds. The strength that we saw in the previous two weeks continued into Tuesday.
As for 1Q24 vs. 1Q23, we've already mentioned the hits to 1Q24 (China weakness for all vehicle sales, Fremont M3 production, Berlin domestic terrorists, Houtis attacking Red Sea shipping, U.S. interest rates, etc.). What has gone mostly unsaid has been that 1Q of any year is typically tough (people don't like buying their new car in winter) but 2023's Q1 had a unique positive catalyst that pushed demand higher than otherwise: an enormous cut in prices of the vehicles. If you look at this spreadsheet from a Reddit post, you'll see that on Jan12, 2023, prices of a LR Model Y dropped from $65,990 to $52,990. Subtract another $7500 for IRA incentives and you're looking at a near $20K more affordable vehicle. Thus, 1Q23 benefitted tremendously from the big Tesla price drop and also from the IRA incentives. While Jan of 2024 saw some improvements in the IRA credits being placed up front for Model Y buyers, Model 3 buyers lost the credit in 1Q24. Considering all the forces working on 1Q23 and 1Q24, a 9% drop in deliveries in 2024 is not so terrible after all. It really wasn't caused by people not liking Elon, as Fudsters in the main investing forum suggested throughout the day.
The bad news about an effective 3% drop on news is that between now and the post-ER period, there's room for more drop. OTOH, the serious buying on Tuesday in the mid-160s after this low delivery P&D report is very encouraging. I suppose where we go from here depends on what we run out of first: investors willing to sell in the mid 160s or investors willing to buy there. Ultimately, as sellers focused on Tesla as a carmaker get out and long-term investors focused on the coming FSD and robotaxi revenues come in, I think you will see TSLA shares held more and more by investors who are in for the long run and for the big gains. These investors are less likely to sell on small gains, which will make the next rally very interesting if such a transition is deep. Hoping so.
According to the Tesla IR Press Release, the 1Q24 Earnings report will be Tuesday, April 23.
Percent of selling tagged to shorts rose to 60% on Tuesday. I guess that answers the question, "was anyone trying to give TSLA a bigger push downward on Monday?"
Yields on 10 year treasury bonds closed higher at about 4.35% on Tuesday
Max pain Tuesday morning was 175. The tallest put wall is at 160 and the market makers would prefer for TSLA to remain above 160 this week. If the stock were to climb, the MMs would enjoy seeing it run above the 170 and 172.50 put walls.
Tuesday's TSLA options volumes
Looks like the lower bollinger band did the trick on Tuesday and produced the bounce needed to keep TSLA within the bands. Unfortunately, bounces off the lower BB with TSLA usually are good for a day and then definitely more vulnerable after that.
Conditions:
* Dow down 397 (1.00%)
* NASDAQ down 156 (0.95%)
* SPY down 3 (0.64%)
* TSLA 166.63, down 8.59 (4.90%)
* TSLA volume 116M shares
* Oil 85.49
* IV 53.0, 80%
* Max Pain 175
* Percent of TSLA selling tagged to shorts: 60%
* Volume at 4pm closing cross: 6.8M shares
Last edited: