Tesla; A short historical chart analysis
Updated
DISCLAIMER
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company's stock history and trend analysis with a subset of buyer and seller behaviour.
Behaviour Analysis
If anyone has seen any of the analyses' coming out of ARK on Bitcoin buyers and sellers, this is a little like that but with very specific buyers and sellers being analyzed. This is a small subset of the history of the stock, and only major groups will be organized, but the overall trend analysis is in support of a growth channel, as provided on the chart, but a follow up question/general wonder if that channel will hold with recent changes.
For those not following, Elon Musk has recently taken Bitcoin off the table (temporarily) for Tesla, citing environmental concerns. Without me getting into this, ARK is rather unhappy, with several of Cathie Wood's underlings going on angry man-baby rants on twitter (and getting shut down on them all). Mocking rich people is fun, and should be a common public sport.
While the arrows I have pointing to ARK doubling down on the Tesla bet is not perfectly exact, the general time frame stands. This serves as an important reminder of what these major groups are looking for in a chart and trend analysis, but also highlights their general belief that this growth channel is correct. My guess is this is also how they see Tesla going to 3k within 5 years with the appropriate positive catalysts correlating to developmental goals and timelines of Tesla's development cycle.
This is also a great reminder of how to scale and diversify investments. ARK has a wealth of Tesla shares normally tied up in their ETF, but we see they took in-flows to buy more Tesla at the bottom of the channel (likely keeping Tesla inside this channel) and selling at the high of the channel. While they took temporary massive increases in their Tesla investment, their was a base level unmodified through the event.
What is even more interesting, is Michael Burry's major short movement against Tesla. Burry and Scion probably recognized the bubble outside of the growth channel, and jumped on it immediately. My guess is that they are beginning to cover, as Tesla is far outside of their previous growth channel, but there is the possibility Burry is playing a game of wait-and-see.
With the recent wedge between Musk and Wood over Tesla, it will be interesting to see if ARK looks to buy in to Tesla again for the impulse series, or if they are going to take a more backseat approach and look for other groups to moderate price discovery for Tesla. Still one of the most heavily shorted stocks, Tesla represents a unique battlefront between Bears and Bulls, where neither is right and both are fighting on shifting sands. Tesla has enough foundation and momentum to move forward as a juggernaut of capitalism, but when controlled by a mad kind, the battle becomes psychological.
With an average 10 day volume of 33 Million shares, price changes can be fast and volatile. This analysis is not meant to be a price prediction or financial advice, because the market only cares so much about trend analysis. While these big players create a self-fulfilling prophecy of growth channels, trend analysis and wave series congruence, their attention and money can be swift to change directions.
My hypothesis is that there is an institutional turnover right now, where institutions are deciding their big bets for the next year, and whether or not Tesla has a part in it. Tesla has a bright future ahead, but Elon Musk pushes harder and harder on investor confidence.
RSI analysis
The RSI serves as a good indicator for overall buying vs selling, the higher the RSI the more buyers and buying, lower the RSI vice versa. We see that the January peak correlates to high RSI, stepping into overbought territory. Furthermore, we see the decrease in RSI with decrease in price. While there would be a general favourable trend pointing to a time to buy right now, it is important to look at historical data and see that Tesla has a habit of staying in overbought territory for RSI. It would be easy to look at that and say, investors are overall bullish and Tesla is bound to bounce back hard from their oversell struggle, but equilibrium must be met. As this wave of overly bullish investors re-analyze the field, looking at Tesla's growth and compared to other mainstream available bets, it will be interesting to see the how Tesla's price plays out. Furthermore, the MACD supports the possibility of an extended down period, bringing Tesla back down to reality, or back down to a previous resistance level and sending it right back up as shorts look to cover.
High Volume Periods
Suggesting Tesla isn't a normally high volume stock would be wrong, but compared to these periods with >200M volume, perhaps we are due for a big week soon. It looks like we are well overdue according to historical trends, but Tesla has been trying to find a catalyst on either side to make that happen. The recent crash took a bite out of valuations, and NSTB coming out confirming Autopilot was not on did not give them that bump back up.
Things to Watch for
The following is an extremely short list of events to keep an eye out for, with some explanation:
Disclaimer
This is purely for an educational retrospective and has literally 0 implications for future price. Furthermore, ARK and Burry are only small components of the total price action. While both have followers enough to amplify movements, there are larger economic forces than either. Hopefully there is some insight in here for everyone. If you have any questions regarding this post, Tesla price action or anything at all that might be relevant, please feel free to leave a comment.
Thanks!
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company's stock history and trend analysis with a subset of buyer and seller behaviour.
Behaviour Analysis
If anyone has seen any of the analyses' coming out of ARK on Bitcoin buyers and sellers, this is a little like that but with very specific buyers and sellers being analyzed. This is a small subset of the history of the stock, and only major groups will be organized, but the overall trend analysis is in support of a growth channel, as provided on the chart, but a follow up question/general wonder if that channel will hold with recent changes.
For those not following, Elon Musk has recently taken Bitcoin off the table (temporarily) for Tesla, citing environmental concerns. Without me getting into this, ARK is rather unhappy, with several of Cathie Wood's underlings going on angry man-baby rants on twitter (and getting shut down on them all). Mocking rich people is fun, and should be a common public sport.
While the arrows I have pointing to ARK doubling down on the Tesla bet is not perfectly exact, the general time frame stands. This serves as an important reminder of what these major groups are looking for in a chart and trend analysis, but also highlights their general belief that this growth channel is correct. My guess is this is also how they see Tesla going to 3k within 5 years with the appropriate positive catalysts correlating to developmental goals and timelines of Tesla's development cycle.
This is also a great reminder of how to scale and diversify investments. ARK has a wealth of Tesla shares normally tied up in their ETF, but we see they took in-flows to buy more Tesla at the bottom of the channel (likely keeping Tesla inside this channel) and selling at the high of the channel. While they took temporary massive increases in their Tesla investment, their was a base level unmodified through the event.
What is even more interesting, is Michael Burry's major short movement against Tesla. Burry and Scion probably recognized the bubble outside of the growth channel, and jumped on it immediately. My guess is that they are beginning to cover, as Tesla is far outside of their previous growth channel, but there is the possibility Burry is playing a game of wait-and-see.
With the recent wedge between Musk and Wood over Tesla, it will be interesting to see if ARK looks to buy in to Tesla again for the impulse series, or if they are going to take a more backseat approach and look for other groups to moderate price discovery for Tesla. Still one of the most heavily shorted stocks, Tesla represents a unique battlefront between Bears and Bulls, where neither is right and both are fighting on shifting sands. Tesla has enough foundation and momentum to move forward as a juggernaut of capitalism, but when controlled by a mad kind, the battle becomes psychological.
With an average 10 day volume of 33 Million shares, price changes can be fast and volatile. This analysis is not meant to be a price prediction or financial advice, because the market only cares so much about trend analysis. While these big players create a self-fulfilling prophecy of growth channels, trend analysis and wave series congruence, their attention and money can be swift to change directions.
My hypothesis is that there is an institutional turnover right now, where institutions are deciding their big bets for the next year, and whether or not Tesla has a part in it. Tesla has a bright future ahead, but Elon Musk pushes harder and harder on investor confidence.
RSI analysis
The RSI serves as a good indicator for overall buying vs selling, the higher the RSI the more buyers and buying, lower the RSI vice versa. We see that the January peak correlates to high RSI, stepping into overbought territory. Furthermore, we see the decrease in RSI with decrease in price. While there would be a general favourable trend pointing to a time to buy right now, it is important to look at historical data and see that Tesla has a habit of staying in overbought territory for RSI. It would be easy to look at that and say, investors are overall bullish and Tesla is bound to bounce back hard from their oversell struggle, but equilibrium must be met. As this wave of overly bullish investors re-analyze the field, looking at Tesla's growth and compared to other mainstream available bets, it will be interesting to see the how Tesla's price plays out. Furthermore, the MACD supports the possibility of an extended down period, bringing Tesla back down to reality, or back down to a previous resistance level and sending it right back up as shorts look to cover.
High Volume Periods
Suggesting Tesla isn't a normally high volume stock would be wrong, but compared to these periods with >200M volume, perhaps we are due for a big week soon. It looks like we are well overdue according to historical trends, but Tesla has been trying to find a catalyst on either side to make that happen. The recent crash took a bite out of valuations, and NSTB coming out confirming Autopilot was not on did not give them that bump back up.
Things to Watch for
The following is an extremely short list of events to keep an eye out for, with some explanation:
- Tesla-ARK communication: ARK is mad at Tesla, ARK is also in a little bit of a tight spot so them starting &*%$ would be interesting, and watching Elon hold back or bite in is going to be a big prediction for the follow-up. Personally, Elon is getting to be more and more of a PR risk, he is upsetting a lot of previous investors that used to love him, while bringing on a new wave of fanatics. As he burns bridges with those, watching the general tone towards Elon change will be important. While Tesla may be one of the most important companies for the future of Humanity at this juncture, and it's sibling-relationship with SpaceX is huge, never underestimate mob mentality.
- ARK buying in: ARK makes it known when and what they buy every day, keeping an eye on this is a great way to look for some undervalued investments, but ARK rarely does quick trades, so don't look to day-trade following ARK. Furthermore, I have spent a significant amount of time analyzing days when ARK buys, and it doesn't look like they ever cause a massive shift in momentum the period of their buys. This is a mix of choosing high volume days, being a low volume buy and ultimately, risk mitigation.
- Shorts Covering: A massive short volume, some big put aggregates and tightly held shares could mean one covering could lead to dramatic price increases followed by a chain reaction of shorts covering.
- Margin Calls: This is currently happening, how Tesla reacts to this will be interesting, but my guess is that anyone getting margin called has some puts on Tesla, so it'll be interesting to see what happens in the near term.
- Tesla news: Cybertruck is coming, revamped Model 3, Y, S and X are also on the table. Look for some major advancement in the redesign that could be a good catalyst. Elon is pushing the Texan Tesla-Town and is pushing for advanced precision in fabrications. Both of these could be big.
- Autopilot: Elon keeps opening his mouth and Tesla keeps correcting it. Looking for a major pivot moment for either is going to be big. If autopilot is <2 years away like Elon suggests, big, if it is >5 years away, oof.
- Biden's Stimulus and Environmental Package: Look out for big tax credits or spending increases to EV cars that might get Tesla some more headwind. It was the carbon tax credits that kept Tesla afloat and liquid originally, any more advances or decreases would have large implications for them.
Disclaimer
This is purely for an educational retrospective and has literally 0 implications for future price. Furthermore, ARK and Burry are only small components of the total price action. While both have followers enough to amplify movements, there are larger economic forces than either. Hopefully there is some insight in here for everyone. If you have any questions regarding this post, Tesla price action or anything at all that might be relevant, please feel free to leave a comment.
Thanks!
Note
ARK bought back in 5/18/2021 (yesterday), I suspect Cathie still believes in that growth channel.
Disclaimer
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