Thursday

Tesla's Oh S#!t Move

"It seems that I have always been ahead of my time. I had to wait nineteen years before Niagara was harnessed by my system, fifteen years before the basic inventions for wireless which I gave to the world in 1893 were applied universally."
--Nikola Tesla
=====================
Tesla #TSLA reported earnings last night...

The numbers were well received...

Tesla's stock price gapped higher this morning forming what I call an Oh S#!t Gap... and yes, that's a technical term😂.

What's actually happening? A number of things actually...  There was a bullish chart pattern (Bull Flag) that was just begging to resolve higher... 

Institutional owners were clearly happy with the results and the forward guidance (and likely bought more shares)...  

But the biggest propeller of the move higher?  Shorts covering their positions.  That's what happens when short sellers get stopped out of their positions as a stock moves higher.  Think of it as a buyer getting stopped out of a position when a stock he owns breaks down through the level he designated as his stop level... in reverse.

When a trader is stopped out of a short at all time highs for a given stock, it tends to be a dramatic move (because who wants to sell a stock as its breaking strongly through all time highs)...  Thus the trader is often caught screaming "Oh S#1t" as he tries to find enough shares to buy to cover his position.

I have no idea if that's the case here...  But it sure looks like there was some panic buying this morning.

My Most Popular Posts

TAOST Topics

How To Trade Emotional Capital simple trading Simple Day Trading futures trading swing trading Emini Trading How It Works stalk candidate Bitcoin trade idea Daily Simple Trading Habit TAOST market update support and resistance trading intraday Process how to trade Bitcoin price action simple trading tools what to buy what to trade Best Retirement Investments Chart Patterns Focus New Trader Sins Swing Trade TAOST Trading principles day trading lifestyle how to day trade keep it simple risk risk management trends Are you too old Confidence FAQ FASTQ How To Invest Income streams It takes as long as it takes MAR Retirement Crisis Retirement Investment Retirement Trading TAOST Power Zones TAOST Price Clusters Trade Pattern day in the life of a day trader learn to trade performance improvement sell signal side hustle the power of simple trading psychology trading rules trend persistence ultimate side hustle Buy Signal Charts To Watch Coil Distraction How To Trade EUR How to trade SPCE Mistakes Oh S#!t Gap Oil Optimization Process Ownership Portfolio Trade Private Equity Professional Gap Retirement 911 Risk Arbitrage S&P 500 Sacrifice Shooting Star TAOST Price Structure Trading & Poker Trading Components Trading Myths Value Why You're Only 1 Setup Away chaos theory compounding context diversification downtrend extra money financial freedom how much money how to information is the stock market random kis linear regression channel lock limit down meditate money money management negative compounding optimize thinking pandemic position size quantum leap improvement random random market update risk management plan sector selloff simple day trading risk management simple day trading strategy that works stock broker trading secrets training trend analysis