A huge 2020 was cumonated this week for Tesla Inc (NASDAQ: TSLA) investors after Tesla was added to the S&P 500 index at a record high market cap of above $625 billion. Tesla shares hit new all-time highs on Friday on forced institutional buying in the closing minutes and inflicting even more pain on Tesla’s battered short sellers.
Tesla short sellers got a bit of a break on Monday after profit-takers drove the stock down 5.9%. That pullback has earned Tesla short sellers a more than $1.8 billion profit on Monday.
Horrendous Year For Shorts: Even after Monday’s gain, Tesla short sellers have endured another $4.3 billion in net-of-financing, mark-to-market losses in the month of December.
Following Monday’s pullback, Tesla shares are still up more than 730% year to date, and short sellers have been taking a pounding all year. As of midday on Monday, Tesla short sellers have endured $38.2 billion in mark-to-market losses in 2020, according to S3.
Despite the huge losses Tesla short sellers have been adding to their positions ahead of the S&P 500 inclusion. S3 reported that Tesla’s short interest has increased by $1.5 billion over the past 30 days.
Shorts were active ahead of Tesla’s S&P inclusion and we may see continued short selling into the new year as short sellers look for the short-term pre-inclusion momentum and speculative long buyers to sell their long positions and realize mark-to-market profits in this tax-year.
Tesla, Inc., formerly Tesla Motors, Inc., designs, develops, manufactures and sells fully electric vehicles, and energy storage systems, as well as installs, operates and maintains solar and energy storage products.
The Company operates through two segments: Automotive, and Energy generation and storage.
The Automotive segment includes the design, development, manufacturing, and sales of electric vehicles.
The Energy generation and storage segment includes the design, manufacture, installation, and sale or lease of stationary energy storage products and solar energy systems to residential and commercial customers, or sale of electricity generated by its solar energy systems to customers.
The Company produces and distributes two fully electric vehicles, the Model S sedan and the Model X sport utility vehicle (SUV). It also offers Model 3, a sedan designed for the mass market.
It develops energy storage products for use in homes, commercial facilities and utility sites.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 503.78.
The projected upper bound is: 714.32.
The projected lower bound is: 594.04.
The projected closing price is: 654.18.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 80.1421. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 61.83. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed down -45.140 at 649.860. Volume was 100% below average (consolidating) and Bollinger Bands were 9% wider than normal.
Open High Low Close Volume 666.240 668.500 646.070 649.860 96,649
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 638.80 501.97 312.93 Volatility: 87 71 105 Volume: 66,696,736 43,430,512 69,186,872
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TESLA INC is currently 107.7% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into TSLA.O (mildly bullish).
Our trend forecasting oscillators are currently bullish on TSLA.O and have had this outlook for the last 22 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.