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Different way of looking at the TSLA S&P 500 announcement rally, by comparing it to the similar August rally:
~90m shares/day, total 1,350m volume, vs.
~37m shares/day, total 481m shares.
Important: significant extended hours trading volume is included in my figures.
1/ https://twitter.com/garyblack00/status/1335221436596838403 …pic.twitter.com/TvhmMK8aPt
2/ We know it from Q3 SEC reports that by September 30, institutional investors reduced their TSLA stakes from ~60% of the free float to around ~51% of the free float, selling about ~68m shares, or 9% of the float. I believe much of that selling happened related to the rally.
3/ If TSLA rose by $200 against institutional investors selling 68m shares in the aggregate, then a similar $200 rise in the current S&P 500 rally on much lower volume cannot possibly have reversed that mis-positioning - let alone have resulted in an accumulation of 120m shares.
4/ If we crudely assume that institutional selling of ~68m shares pushed the August peak of ~$500 back to $400 equilibrium price levels on volumes of about ~80m/day, then the current ~37m/day rally can at most represent 48% of the reverse accumulation rate.
5/ This methodology approximates the current daily TSLA institutional accumulation rate at 68m/15*0.48 = ~2.2m/day, or about 28m shares so far - 25% of the 120m required for S&P 500 passive index funds.
6/ If true then since the November 16 announcement institutions have only bought back about 25% of the shares required for passive index funds by the end of December 18. If true then much of the TSLA S&P 500 rally is still outstanding and $700+ levels are in play. (!)
Caveats:
big & inaccurate assumptions.
behavioral difference at different price levels
different incentives of market participants between these two rallies
Tesla had good financial news (Battery day & Q3 earnings) since the August event - which wasn't priced in.
I like your reasoning. Altough I think one should calculate this as a geometrical scale and think about how many % the stock has risen in an event X or Y. And to go further look at the candles during those periods and determine the rises in % inside those time stamps.
With my napkin math I arrived at 1200$. Many think I am crazy. But who would have believed that Tesla would 10x in one year.
$TSLA
Yes, my first selling point is $1300. I want to be able to buy back in afterwards.
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