1/25 Massive Tesla Red Day Recap and 1/26 Prediction From Data

After today's price action, it is clear that investors are at disarray and uncertain for the future of Tesla. Here I will detail my analysis of today 1/25, and my predictions for tomorrow 1/26.

In the graph, I plotted three possibilities pre-market 1/25 (from previous Idea, "Looking at Possible Dead Cat Bounce Levels"):

Purple line-arrow (Most optimistic): A bounce of it's low and decay to $188-$190.
Yellow line: Bounce off 0.618 fib line and decay to $185-$186.
Red line (least optimistic): Minimal bounce, straight to $180.

It looks like we went worst case scenario, hitting my $180 target faster than I expected. This confirms investor sentiment; at least until we get some good news from Tesla and guidance.

For tomorrow's price action, I also have three possibilities in mind, so I will look at previous price movements in similar scenarios, as well as use what we know after today to get an some possibilities.

During the last two (Q2, Q3) quarterly earnings, Tesla stock continued dropping for the two subsequent days.

• Q2: An additional 2.75% down from previous close.
  
• Q3: An additional 4.3% down from previous close.
  

Today's event seems different, where the 12%-15% dip that Q2 and Q3 earnings experienced over multiple days seem to have happened in one day.

I'll list the possibilities by what I believe is least probable to most probable:

• Blue line: bounce of $180 support and rise to $186-$188 range. I call this less probable because an increase on the day after a dip after earnings is odd (compared to Q2 and Q3 earnings.) Not impossible though, in the case that today's dip was an over exaggeration and a bulk of investors remain optimistic. (Buyers sitting on the sidelines?)
  
• Yellow line: Bounce between channel $180 - 183.50. I think this is a bit more possible because investors may be sitting in indecision, hoping to wait it out until more news is revealed (low volume perhaps?)
  
• Pink line: Dip below $180 to next fib line $176, and possibly lower. I personally think this is more likely, because it will be line with Q2 and Q3 instances (a dip of 4% from today.) Investors may begin thinking about opportunity cost in holding a stock with no guidance, expectations not met. Investors are in Tesla not because it is a value stock, but because it's a growth stock, and if there is no exciting growth, they may start looking to sell off for competitors that are showing the 100%+ quarterly growth in EV sales.
  

I may revisit a long term analysis of the stock in the future, but for now, those are all my thoughts for tomorrow.

Comment:

We have some news that came late yesterday and premarket:

Cathie Wood buys 148k shares of Tesla according to an article on Investors.

Several negative headlines: 8 Month Low After Earnings, Analyst Sees Another 30% Downside, out of the "Magnificent Seven"

We have a recall of 200,000 vehicles reported on WaPo.

A lot of options contracts expire today; Barchart shows Put/Call volume ratio of 0.87 for today expiring, many of which are in the 180$+ strike price (could be a concern if you are expecting another dip.)

With the stock being above yesterday's close, I'm going to be more cautious, have a stop loss ready.

Comment:

So far, not a very clear-cut day, but the 15 minute looks bullish filling the gap. I am feeling a lot of bull/bear traps, could be a sideways day.

Comment:

Very interesting how TSLA has been moving correlated to SPY on the minute since around 10:15 AM. SPY hit another all time high today. Will SPY keep going and bring TSLA with it? or are we repeating our last ATH from a few days ago?

Comment:

What a choppy day. It looks like the combination of negative news, SPY hitting ATH again, options expiring soon above $180-185 are causing Tesla to move all over the place.

Trade closed: stop reached:

Took a put position Friday looking for a retest through the weekend. Saw a strong, bullish pattern in the early AM and closed out. See Idea: