Updated Elliott Wave Guess for Tesla Motors
Telah dikemas kini
My last Elliott Wave guess for Tesla was two years ago and published here at TradingView.
It was a brave effort to forecast far into the future and was bearish at the time, looking for a drop to 193. See the link below for reference.
The updates relate to going back to 2006 as the top of wave 1 since that was when the Roadster was sold. The Model-S in 2012 kicked off the next wave of advance. Tesla is going through a lot of growing pains and digesting a lot of difficult news:
The latest action down is the result of a perfect storm of bad news:
1. Tesla and SolarCity attempting to merge, putting two cash-flow losing companies together increases financial needs and pressures equity holders who either get diluted with new shares or the prospect of much worse - of not getting capital to fund development.
2. Accidents with the self-driving software by drivers who have violated the law and taken their eyes off of the road. This has pushed the attention away from the technology and focused on the negative side of Tesla's business.
3. GM's Bolt is widely discussed as a competitor with its 200 mile range. Plenty of other manufacturers are lining up to compete. This is what Elon Musk wanted to drive adoption of EV as an alternative to internal combustion engines (ICE).
4. Musk's Space-X had an explosion, unexplained, of a valuable rocket with valuable payload of $200 million of Facebook's Zuckerberg's satellite on board. Since Musk funds Space-X and Tesla and SolarCity, the setback hurts perception that Elon will have trouble raising funding.
5. Gigafactory development and production concerns are omnipresent: Is gigafactory the right answer with the right technology? Is there a better battery technology than Lithium Ion? Can gigafactory cut the price enough to make a difference and cut prices enough?
6. Model-X production problems and a softening of car sales, together with soft economic activity in Europe and America has investors wondering if there is enough demand for Tesla's to maintain production.
7. Activist short-seller investor Jim Chanos openly derided Tesla's prospects for profitability in a recent report. He is widely respected and called for the collapse of Enron, a famous overleveraged utility company in Texas that crashed and burned and crushed the faith of investors worldwide. The issue there was fraud and clever accounting tricks to hide risk and assets and therefore leverage in offshore partnerships.
8. Google's, Apple's and now Uber's competition. Uber started up a self-driving car in Pittsburgh, but manned by a backup driver and assistant.
For a thorough overview of Elliott Wave and NEoWave which is displayed here, consider reviewing Glenn Neely's treatise on the subject called "Mastering Elliott Wave" published back in 1988 and still for sale. I was his student and helped edit the book.
Another major disclosure: I bought a Tesla last week from a previous owner, so now I am officially biased. Used Tesla's have fallen dramatically in price and now seem cheap by comparison to other cars. Check online auto sales site to confirm, but the Model-S 60 has fallen dramatically this summer after the release of the Model-S 100D and its incredible range over 300 miles. The future is now. Climb on board.
Good fortune to you,
Tim
September 16, 2016 2:14PM EST
Warning: Theoretical price action is included on this chart. I derived price action from pre-2006, the end of the first IMPULSIVE rally I'm labeling wave (1). Wave (2) is a long, protracted sideways drift higher the culminates with the release of the Model-S. Since then we had a big advance and then are in another wave-2 as all of the issues get worked out and Model-3 for mass production launches the next advance in TSLA shares. Possible 6-fold advance from here starting as early as mid-2017.
It was a brave effort to forecast far into the future and was bearish at the time, looking for a drop to 193. See the link below for reference.
The updates relate to going back to 2006 as the top of wave 1 since that was when the Roadster was sold. The Model-S in 2012 kicked off the next wave of advance. Tesla is going through a lot of growing pains and digesting a lot of difficult news:
The latest action down is the result of a perfect storm of bad news:
1. Tesla and SolarCity attempting to merge, putting two cash-flow losing companies together increases financial needs and pressures equity holders who either get diluted with new shares or the prospect of much worse - of not getting capital to fund development.
2. Accidents with the self-driving software by drivers who have violated the law and taken their eyes off of the road. This has pushed the attention away from the technology and focused on the negative side of Tesla's business.
3. GM's Bolt is widely discussed as a competitor with its 200 mile range. Plenty of other manufacturers are lining up to compete. This is what Elon Musk wanted to drive adoption of EV as an alternative to internal combustion engines (ICE).
4. Musk's Space-X had an explosion, unexplained, of a valuable rocket with valuable payload of $200 million of Facebook's Zuckerberg's satellite on board. Since Musk funds Space-X and Tesla and SolarCity, the setback hurts perception that Elon will have trouble raising funding.
5. Gigafactory development and production concerns are omnipresent: Is gigafactory the right answer with the right technology? Is there a better battery technology than Lithium Ion? Can gigafactory cut the price enough to make a difference and cut prices enough?
6. Model-X production problems and a softening of car sales, together with soft economic activity in Europe and America has investors wondering if there is enough demand for Tesla's to maintain production.
7. Activist short-seller investor Jim Chanos openly derided Tesla's prospects for profitability in a recent report. He is widely respected and called for the collapse of Enron, a famous overleveraged utility company in Texas that crashed and burned and crushed the faith of investors worldwide. The issue there was fraud and clever accounting tricks to hide risk and assets and therefore leverage in offshore partnerships.
8. Google's, Apple's and now Uber's competition. Uber started up a self-driving car in Pittsburgh, but manned by a backup driver and assistant.
For a thorough overview of Elliott Wave and NEoWave which is displayed here, consider reviewing Glenn Neely's treatise on the subject called "Mastering Elliott Wave" published back in 1988 and still for sale. I was his student and helped edit the book.
Another major disclosure: I bought a Tesla last week from a previous owner, so now I am officially biased. Used Tesla's have fallen dramatically in price and now seem cheap by comparison to other cars. Check online auto sales site to confirm, but the Model-S 60 has fallen dramatically this summer after the release of the Model-S 100D and its incredible range over 300 miles. The future is now. Climb on board.
Good fortune to you,
Tim
September 16, 2016 2:14PM EST
Warning: Theoretical price action is included on this chart. I derived price action from pre-2006, the end of the first IMPULSIVE rally I'm labeling wave (1). Wave (2) is a long, protracted sideways drift higher the culminates with the release of the Model-S. Since then we had a big advance and then are in another wave-2 as all of the issues get worked out and Model-3 for mass production launches the next advance in TSLA shares. Possible 6-fold advance from here starting as early as mid-2017.
Nota
Elon Musk's Solar Roof & Tesla Battery anouncement from last week on the 28th seemed to be lost in the media frenzy over the election, FBI announcements, Anthony Weiner's 600,000+ emails that potentially incriminate HRC: Either way, I need to add "Solar City acquisition" on this chart and "Solar Roof" starting next year when they will be available. If they are easy to install and if they try to overcharge for them since it is so unique and special they likely will, but sales there could surge. Given the timing of the last advance from a market cap of $3 billion to a lofty $30 billion long after sales of Model-S gained strong traction, it may take awhile for the Model-3, Home Battery and Solar Tile products to gain traction. These combined could lift Tesla to the $50-$60 billion market cap level, which is almost a double from current levels. The bulls who want this rally to happen overnight will be disappointed and the bears that want Tesla to melt-down to $10 billion or less valuation will likely be frustrated too. The opportunity to own Tesla at a $20 billion valuation would provide a triple to get up to the $60 billion valuation I am forecasting for the 2017-2018 time frame, so do view any drop in price with the $60 billion likely valuation and compare the risk/reward. TSLA is currently sitting at $200 on October 31, 2016.
Possible Execution strategy: If you set a buy limit at $150 and $160 per share now and also purchase $140 strike and $150 strike puts going out 1 year, then you will have very low risk if you get filled on your buy limit order.
Feel free to comment, and come join us in the Key Hidden Levels Chat Room here at TradingView.com
Nota
Still hovering as anticipation builds for Model 3 and as competition builds dramatically. Gas prices remain low and for those who believe that high gas prices are needed for 
TSLA to rise in price, that will be a reason why short sellers will remain brave and bulls will be shy to step up and buy. For now there are 40% of the available shares (the "float") sold short and
TSLA represents probably one of the riskiest squeeze stocks in the market. It would be easy to move TSLA shares up 10% to 20% on just the vacuum of low-liquidity in the market, coupled with small amounts of new cash buying.
If you own shares of TSLA in a margin account, and if you want TSLA shares to go up in the near term, move those shares over to your cash account so they can't be lent out to short sellers. Just moving your shares over to "cash" from "margin" is the equivalent of buying those shares in the open market.
Cheers to TSLA for amazing products and a great vision for the future. I can't wait to get a TSLA roof next year.
Cheers! Happy Holidays! Merry Christmas! Feliz Navidad! Happy New Year!
Tim 12:32PM EST 12/23/2016
Nota
Here we sit near the end of 2017 and the forecast for this year is looking pretty good: "The opportunity to own Tesla at a $20 billion valuation would provide a triple to get up to the $60 billion valuation I am forecasting for the 2017-2018 time frame, so do view any drop in price with the $60 billion likely valuation and compare the risk/reward."Tesla's market cap has indeed reached the $60 Billion valuation and the bears have been frustrated and the bulls have been too. This big of a company will take time to get momentum for the next leg of the advance when software sales will kick in on their new models of cars and $9000 per pop on the sale of driver-assisted vehicles.
The solar roof will kick in sometime soon, together with the success of the Australian battery installation will likely increase demand for in-home-solar+battery backup sales. The Model-3 is quietly overcoming obstacles which prevent mass-production of vehicles, so once that kicks in we can see some upside. But until the line produces, setbacks will be frequent. The clear need for more capital (read as: TSLA will sell more shares, convertible bonds, bonds, and accept deposits, etc) to continue investing in charging stations, production capacity, build-out of more gigafactories, Tesla Semi-Truck and the luxury 620 mile range Roadster. In the last year, I think I've read over $100 billion of capex has been announced in the EV space with the latest being $40 Billion from Volkswagen. All of this money will drive innovation, adoption, demand and a bigger future for Tesla and for EV in general. Stay tuned, these are exciting times to be alive.
Dec 3, 2017 9:35PM EST
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