Thanks to Ivan Labrie (@IvanLabrie) here on TradingView for putting up this graph this morning in the Key Hidden Levels chat room because it really highlights how Tesla has kept pushing higher relative to crude oil. Of course we are all watching crude oil for a bottom down here somewhere near this $30-$20 range, so comparisons going forward might be very difficult. However, if you were able to have held an equal amount of crude oil short positions adjusted to each day's close, your P&L would like like this for your position in TSLA with multiple corrections of 30% to shake out the weak holders and the profit takers.
Long term winners have many, if not 10 or more corrections of 25%-35% during their growth phases. Look to the historic charts of MSFT, DELL, CSCO, AMZN, NKE, and so on to see exactly what I mean. If you put your graph into log-mode and not arithmetic scale, then you will see the corrections in equivalent size. It is easy to lose perspective when you only look at "arithmetic charts", where the price scale is 1 point increments instead of 1% increments in a log-scale chart.
You can see TSLA is up to its trend the runs across the peaks from the past couple of years and that doesn't mean it will stop but it shows you how powerful this trend has been. 1755% is a tremendous rally and for anyone creative enough and clever enough to have kept this position on during this entire rally, well, they should be congratulated.
Keep thinking creatively.
Tim
11:08AM EST January 19, 2016 TSLA/USOIL @ 7.20 TSLA @ 209.32, USOIL @ 29.09
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Really nice reaction down to 5.5 from 7.3 in the two weeks since posting this pattern. Today's range is monstrous with crude down 6% and TSLA up 4%. When you find a trend that you believe in, the best thing you can see is a correction to get involved. I hope you viewed the drop in TSLA and the rally in crude oil as an opportunity. I see crude working higher over time and I also see TSLA doing the same.
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More downside to 5.25 last and now a 30% correction off of the high. I'm getting plenty of comments from people telling me that Tesla is down because crude oil is down. People know I have been a Tesla champion and almost seem happy that Tesla is down. I'm not sure if I am reading their intentions correctly, so I'll ask next time. But here's what I see: Tesla is a luxury car that is independent of oil prices. If oil goes to near zero, people will still want to buy a Tesla because it is an amazing, beautiful car. I have driven the P85-D and it is absolutely jaw-dropping amazing. So, given how Model-S is selling more than other luxury models in their peer group, I think it is fair to put Tesla in with auto manufacturers, high technology, software and other categories. Also, people are waiting for the Model-X and they aren't producing them quickly at all. I think there are about 15,000-20,000 vehicles in their backlog, but production is very slow. I think this is why the current earnings report will be poor. The rest of the world might be buying the Model-S because it is available. The competition for the next series in the $35,000 range (Model 3) is getting quite strong with the Chevy Bolt, eGolf, etc... but Tesla is vulnerable ahead of the next earnings report and the short sellers have a free ticket to drive the price down in this environment. They (short sellers) have been waiting a long time to get a move down like this, so I hope they take advantage of it. I prefer to buy TSLA only since I am cheering for them and so far that has worked just fine for me. Keep TSLA on your watch list and stay tuned: I think next week will be very interesting. The valuation on TSLA gets better and better with every point down it goes. $160 is a bargain, but it could certainly go to $140 along the way, before a decent rebound. The earnings call will make TSLA move +50 or -50. Stay tuned.
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32% off of the high now and right down to the lower trendline already. It takes guts to buy. Articles posted today on SeekingAlpha said there are concerns about "margin loans" Elon Musk has taken on to buy shares of TSLA. But the amount borrowed against the amount of stock he owns is far beyond and "margin call" level. If TSLA fell to the margin call level, AAPL would be able to scoop up TSLA for such a modest amount it would be under $10 billion in valuation.
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Nice rebound from 4.93 to 5.5+ or a 13% Rally from the last post.
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devendra
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Learning and growing with Tim's perspective. Thank you Tim for this platform and your ideas
A-shot
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if im not mistaking, the trend has been violated for the first time and it is breaking lower with oil prices on the rise and tesla not picking up speed
timwest
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The trendline has been violated for sure. Update to follow! I watch TSLA with an eye on Crude Oil - always. It's good to watch what everyone is watching. Tesla has the good news "all out" now with the Model 3 orders and such. Now the bad news is all over the place - and usually forms a bottom when there is enough bad news and the short sellers take advantage of the situation. That's how markets work - manic-depressive. Focus too much on the good and too much on the bad, and you get wild action in the stock price. Someday we will all benefit from having multiple auctions each day instead of unlimited "spread trading". The way the NY Open is an auction market and so is the close. We could benefit from doing an auction every so often instead of what we see now.
A-shot
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DId you know that on the last 5 minutes of the trading day on the Nordic markets there is an auction instead of trading, on some markets even in the middle of the day
A-shot
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This was spot on. I wonder why did you not draw a line under for the support? Because it is right there now
timwest
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I just did update the chart. Thanks for your comments @2use.
A-shot
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thax for that @timwest. I noticed that with each correction, the downturn gets steeper. Last one was almost a straight line. i wonder how that can be a different case, seeing the selloff in cult stocks now
timwest
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The "vapor" stocks that have been crushed are a good thing. It was a bubble that Yellen wanted to POP. Last year she pointed out the Biotech BUBBLE and people seem to have forgotten about that. Well, biotech have been crushed, thank goodness. I think the new year, coupled with higher rates from the Fed and the de-margining of investors and the drop in crude oil as the reasons for the selloff in TSLA. TSLA has also suffered from VERY SLOW production of Model-X and competition from others in their Model-3 future model. Either way, time will tell. I'm tempted to move my model-x order over to the model-s, but I'm waiting to see if Tesla will give me a little "something" to make the change.
INNA
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Amazing. thank you Tim
mazdaki
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Tim,
1. do you believe in the Gartner Hype Cycle?
2. If so, don't you think TSLA qualifies as one?
3. If you review the hype cycle, where in the hype cycle do you think TSLA is at?
4. What will it take to make you believe that we are in long term down trend?
I value your feedback. Bulls have had a great ride thus far on this stock. And usually that is the case in Hype stocks until the bottom falls out.
Thanks