Short-Term TSLA Price Movements - 2013

[Johann Koeber]

My feeling here is: volatility is increasing. Noone really knows what is about to happen the next 2-3 days.

I'll just let the dust settle (it might be a sandstrom - who knows) and pick it up from there.

 

[deonb]

I hope you don't have the limit at 55.00. Here is why: 55.00 is a typical resistance level. What TSLA will do now is either break through it (bad sign) or bounce off it (good sign). People knowing this and expecting it to bounce off will place their bids slightly higher (say 55.03) to get filled before everyone who put in 55.00. Now, this turns into something of a bidding war, so someone will be waiting at 55.11, someone at 55.14 and so forth. These people will get their orders filled in both the good scenario (bounce) and bad scenario (break through 55). Someone with a limit order on 55.00 only gets filled in the bad scenario. So that is not a good bid.

Sorry if this was known, obvious and otherwise insulting.

PS: I expected the stock to bounce really hard, so I put in 55.34 to be on the safe side. Even though that looks like the bottom on the Google Finance chart, I believe I saw orders fill as low as 55.16 for a few seconds there.

. Yeah, it was actually in for $55.15. It didn't hit for some reason - even though the listed low is 55.12. At this point it's so close, I'll just watch it manually and change it to market a few seconds before close.

 

[Raffy.Roma]

Do you guys think that the short squeeze is over now?

I think that there will be other short squeezes in the following months expecially if there will be news concerning the Supercharger network and options for Model S.

 

[carrerascott]

Added some at 55.55. Not a lot. Figured I'd ride what happens tomorrow (and beyond).

Sure hope that CR teaser is real!

 

[Norbert]

Huge volume today: 9.75 million.

Hopefully this means that those shareholders who are fine with taking profit at this level are now replaced with those who want to take the next phase of the ride.

 

[jcstp]

Tesla Motors to install chargers in Normal parking deck

 

[JRod0802]

For those of you who are worried about today's drop, I would just like to point out that other than yesterday, TSLA has never closed higher than it did today. Also, we're up $0.96 from Friday. So if yesterday had closed at around $55 (which which is between Friday's close and today's close), we just would have been steadily increasing and all would be good and stress free. Blips in the stock occur. If you're long, they really don't matter.

Disclosure: I'm long, and have been since I bought TSLA in January 2011. I plan to hold until TSLA has a higher market cap than Porsche, maybe longer.

 

[Benz]

Huge volume today: 9.75 million.

Hopefully this means that those shareholders who are fine with taking profit at this level are now replaced with those who want to take the next phase of the ride.

I think that is the case here. And eventually, when the price will have reached a certain level, they will step out as well, and others will step in again. All are in for the money.

The next wave is not far from now, as good news is coming next week already.

 

[dmckinstry]

Huge volume today: 9.75 million.]
Well, I was going to wait until after the report on the 8th to buy more, but now that it dropped and bounced, I'm afraid to wait. I put in a buy order at way more than I wanted to pay for 100 more shares. That is, more than twice my first purchase.

I hope it will define a new bottom. My last purchase was 200 shares on March 21st at $35.95. That went well.

 

[Curt Renz]

Do you guys think that the short squeeze is over now?

It hasn’t really gotten started. A budding short squeeze failed today because there were plenty of shareholders willing to take profits and supply stock to shorts so they could cover. That’s largely because there was little meaningful TSLA news today. Musk’s comments about autopilot technology to Bloomberg were largely speculative and downplayed by him in tweets and later by the Bloomberg reporter.

A true short squeeze occurs when the news is so good that hardly anyone is willing to sell, thus making it almost impossible for shorts to buy shares at any reasonable price to cover their positions. That catapults prices dramatically. After twenty minutes this morning enough profit takers came forward to halt an attempt at a squeeze. The waves of selling may have each been initiated by a short who forced the price to cascade through protective stops set by longs. During the last half of the session the profit takers kept at it, especially those unwilling to stay through the earnings report. Some of those shares may have been sold to covering shorts in a more leisurely fashion at a better price than the shorts would have had at the opening. The real enemy today was the profit takers, not the shorts.

 

[DonPedro]

I somewhat fail to see exactly the mechanics would be of a short squeeze now. I think many of the "old" shorts have covered and taken their losses, and the "new" shorts are not necessarily far out of the money. Furthermore, if much of the shorting is institutional (as I believe it is), I think they would be able to ride out any obvious squeeze and wait for the subsequent return of the stock to a more natural trading band. If they just sit tight, then nobody is covering and the shorts are not driving the price up. What am I missing?

 

[Curt Renz]

Really close to an outside reversal on heavy volume, not a good technical move today.

Ten years ago I wrote a primer commissioned by McGraw-Hill titled “The Investors Guide to Technical Analysis”. What you say is a sound basic technical assessment of today’s price and volume patterns. However, I do not apply technical analysis to Tesla Motors at this stage of its development. Pure technical analysts ignore news, but Tesla is a disruptive player in an established industry and news matters. We are being presented with a carefully orchestrated chain of comments from its capable, driven and charismatic CEO, and they hugely matter. The ridiculous number of short positions further complicates the analysis.

Tomorrow’s earnings report and next week’s big (Elon’s word) Supercharger announcement are the types of news events that can disrupt the market for TSLA shares, and Elon knows that. The shorts are being expertly played like strings on a violin. Perhaps that’s the meaning behind Elon’s current twitter photo, since he admits he can’t play a violin. We haven’t really seen a short squeeze yet, because profit takers have been willing to accommodate the shorts and provide them with shares. That may soon change.

 

[Johan]

[...] We haven’t really seen a short squeeze yet, because profit takers have been willing to accommodate the shorts and provide them with shares. That may soon change.

... And in all honesty we really don't know how the short interest has changed, if at all, so we can't really tell if the huge volume today is shorts covering and longs taking profit, or if it's "new" longs buying in with "old" longs taking profit.

 

[ShortSlaver]

... And in all honesty we really don't know how the short interest has changed, if at all, so we can't really tell if the huge volume today is shorts covering and longs taking profit, or if it's "new" longs buying in with "old" longs taking profit.

Or that it's a day traders dream stock right now, buying and selling many times throughout the day.

 

[CapitalistOppressor]

It's just another raving Model S review, hard to see how that has to do with the current craziness. But in the July issue, that will keep Tesla in the spotlight over the summer, so that will be good.

Not just another review. The Consumer Reports long term test review, and the one from Edmunds will help legitimize the Tesla brand. If I was an accountant working for Tesla, I'd book an extra couple of billion in brand equity based on that teaser.

- - - Updated - - -

Do you guys think that the short squeeze is over now?

Not even close. It would take weeks of sustained covering to get the shorts out. We'll have a better picture in a couple of days when the short statistics have been released.

 

[gg_got_a_tesla]

Not even close. It would take weeks of sustained covering to get the shorts out. We'll have a better picture in a couple of days when the short statistics have been released.

CO, even when the short statistics are published, how can one tell the difference between (the relative proportion of) fresh shorts vs old stinky shorts?! It's the latter who have more to lose as the stock goes up in quick time, no?! The former can hold on a little longer and may not help trigger the squeeze, right?!

 

[Norbert]

I somewhat fail to see exactly the mechanics would be of a short squeeze now. I think many of the "old" shorts have covered and taken their losses, and the "new" shorts are not necessarily far out of the money. Furthermore, if much of the shorting is institutional (as I believe it is), I think they would be able to ride out any obvious squeeze and wait for the subsequent return of the stock to a more natural trading band. If they just sit tight, then nobody is covering and the shorts are not driving the price up. What am I missing?

If they are mostly big institutions, that might help them avoid an escalating peak, but they will still want to cover once they realize they will lose by being short, as Tesla will be a successful company (unlike Solyndra). Since it will be 'the sooner the better' for them to exit, that will still drive the price up enormously (for a large part, for good) since there is such a high percentage of shorts compared to the float. Unless too many longs will sell for a (too) low price.

Or to put it another way: With Tesla becoming more and more successful, sooner or later the shorts have to cover. Why make it easy for them?

- - - Updated - - -

BTW, why do you think the current shorts are "new" ones? Just a guess, or is there some indication?

 

[CapitalistOppressor]

Stock was parabolic & overbought this morning, the reversal selloff on huge volume flashes a huge caution sign for me in the short run.

I'd be hesitant to pay much attention to anything but the most basic technical factors for a stock like TSLA. It's like looking at technical factors in Geraldo's commentary right before he opened Capone's vault. Tomorrow is the first glimpse the market will ever have at what a profitable Tesla looks like, so basically 99% of the market participants are clueless.

There hasn't been a successful American startup automaker in almost a century. There hasn't been a successful electric car maker anywhere in almost a century. The unique interaction between manufacturing efficiency and regulatory credits is basically a black box.

Because of this mass ignorance, TSLA is just a giant Wall St. Rorschach test, with tens of thousands of buyers and sellers groping around with no examples to guide them. The volatility is because you have a herd of antelopes running around a stadium with blinders on while someone is blaring rock music at them. They think there's a party about to start but it's all kinda scary and exciting and they're worried that maybe there are some lions ready to come down out of the stands to eat them.

 

[luvb2b]

Because of this mass ignorance, TSLA is just a giant Wall St. Rorschach test, with tens of thousands of buyers and sellers groping around with no examples to guide them. The volatility is because you have a herd of antelopes running around a stadium with blinders on while someone is blaring rock music at them. They think there's a party about to start but it's all kinda scary and exciting and they're worried that maybe there are some lions ready to come down out of the stands to eat them.

lol. an interesting observation is recently all the big volume days tesla ends negative. the last big volume up days were around the new guidance. there should be a nice up day around the corner.

also suggest people check out qualcomm chart from 1998 to march 1999. very similar.

 

[Nixx]

Supercharger announcement

I think that there will be other short squeezes in the following months expecially if there will be news concerning the Supercharger network and options for Model S.

I have seen this comment a few times. What exactly do you expect the supercharger network to do to increase profits and revenue? At the moment it's just an expense unless they can lease the network to another car manufacturer, which I don't see as a likely option at the moment.