TSLA: the knives are out.
Daily Plan 4.24.24
TSLA was the most anticipated crash on earnings that never came.
I warned multiple times in this Subtack and reiterated the 137 dollar support level, that the stock price is going to come down to the options and emotions rather than fundamentals which everyone knows suck by now.
This 137 support level was pretty much the swing low before a monster rally today and after hours.
Talking of fundamentals, the company bombed on earnings as well as revenue with negative cash flow. All of this unable to stop the stock from rallying about 12% at time of this post.
So what gives?
The short term options. This stock has a very large put to call ratio indicating smaller traders were heavily buying PUTS on a very high IV from the MM who were raking it in on backs of these high premiums. These premiums now all go to worthless and the option sellers get to keep those juicy prices paid by PUT buyers.
Personally I am hearing almost all retail was short on this stock. May be not the readers of this blog. I hope. You had some prominent retails with large following also spewing negativity about the stock at 52 week lows! A humbling lesson indeed.
Now looking ahead, the action in TSLA comes down to this whole 162-165 area. The bulls now need to overcome this. I think this is resistance and if you look at TSLQ, this corresponds to this whole 37-38 area.
Levels for tomorrow
TSLA is but one part of the equation with many moving parts.
You have core PCE later in the week. You have the 10 year sitting at 10%. Then you have the META and MSFT earnings later which should set the tone of the market.
We also have the weekly level right above us now at 5130.
My key level for tomorrow will be 5130 in emini June index.
Scenario 1: As long as 5130 holds, I expect resistance to come in for a move down to 5060-5070. At time of this blog, we are last trading 5115.
Scenario 2: If we are able to take out 5130, then 5156 may be possible. However I am upfront as always and I am a little wary of META and MSFT earnings. Once these pass, then we can say with confidence some sort of meaningful low is put in place. Minus that the volatility is here to stay.
I may share an update in chat room for subs later in the day after META earnings. META I think has this important resistance at 505-510 area and IF this holds, we can revisit recent lows near 480s.
If you want to like, share or subscribe, make sure you do that as it helps me put out this content at a low cost for folks interested in orderflow.
~ tic
Disclaimer: This newsletter is not trading or investment advice but for general informational purposes only. This newsletter represents my personal opinions which I am sharing publicly as my personal blog. Futures, stocks, and bonds trading of any kind involves a lot of risk. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. I guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC, or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. By reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are courtesy of Ninja Trader, FinViz, Think or Swim, and/or Jigsaw. I am just an end user with no affiliations with them. Information and quotes shared in this blog can be 100% wrong. Markets are risky and can go to 0 at any time. Furthermore, you will not share or copy any content in this blog as it is the authors’ IP. By reading this blog, you accept these terms of conditions and acknowledge I am sharing this blog as my personal trading journal, nothing more.