How OVTLYR's Platform Helps Investors Take Advantage of Volatility In Stocks Like Tesla

OVTLYR, an AI-driven behavioral analytics tool, recently launched a free pilot version of its web-based platform. 

Co-founders Mark Gorzycki and Mahesh Kashyap talked with Benzinga about how the platform helps traders develop educated opinions.

Trading Narratives, Sentiment: The launch of OVTLYR coincides with recent stock volatility fueled in part by speculative commentary on online forums like WallStreetBets and hot topics like famed investor Michael Burry’s bet against Tesla Inc TSLA.

OVTLYR’s behavioral analytics tools, which support over 1,000 of the largest assets by market capitalization on the NYSE and Nasdaq exchanges, are unique to fundamental and technical indicators.

The company’s core product is an AI-driven investing platform that boils down stock market sentiment into favorable stock entries and exits.

In a conversation on how OVTLYR makes an impact on investor portfolios, Gorzycki and Kashyap provided context around its data.

“OVTLYR gives [investors] something to point to and solidify the narrative in their own minds,” Gorzycki said.

“What we do can be very complicated at times and almost requires people to think in a contrarian way which, by definition, goes against human nature.”

In an example of how OVTLYR’s data makes an impact, Gorzycki and Kashyap analyzed Burry’s bet against Tesla, which was reported late last month. According to them, the trade was likely well-timed and held through most of the first quarter.

Through visual aids, Kashyap suggested Tesla’s correction in both time and price came on the heels of sky-high sentiment, as OVTLYR’s data indicated.

Graphic: OVTLYR heat map and oscillator. Red denotes fear. Blue denotes greed.

“If you see here on April 19 or 20, the closing price for Tesla was around $740,” Kashyap explained. “Around that point, the prices started to come down, and that’s reflected in our heatmap and oscillator — the blue bars — indicating that the market was too greedy.”

In late May, though, sentiment turned: “The oscillator started to go up around that time.”

That’s also when it was announced that Burry held a synthetic short position in Tesla.

Gorzycki and Kashyap suggest the position was likely dated and used as short-term financing for other, bigger positions, such as Burry’s bet on inflation.

In other words, It’s likely that Burry initiated his short during what OVTLYR’s software indicates was a greedy period for the stock.

The recent turn in sentiment, which coincides with Tesla’s progress on its insurance, self-driving, supply-chain and robo-taxi initiatives, likely offers investors favorable entry, Gorzycki and Kashyap said, pointing to Ark Invest research that suggests Tesla is a long-term hold.

“Tesla was not the only short position Burry was in the news for,” Gorzycki added. “At the end of the day, he’s basically going head-to-head with the Fed and banking on some form of hyperinflation.

“I look at this Tesla position and think this is a short-term piggy bank for him.”

Graphic: OVTLYR behavioral visibility data highlights the long opportunity investors were afforded in months prior.

Opportunities From OVTLYR's Platform: In a continuation of the conversation surrounding Burry’s rotation in and out of short-term bearish bets, Gorzycki and Kashyap suggested proportionally better shorting opportunities exist in materials and staples.

Graphic: OVTLYR data suggests there are more risks to the downside for sectors like materials, based on behavioral data which denotes the presence of greed or irrationality.

Individual names within those particular sectors are likely to see near-term profit-taking or rebalancing.

More On OVTLYR: OVTLYR is democratizing access to actionable stock market sentiment insights.

Going forward, the company is looking to expand the depth and breadth of its product portfolio with additions to in-app research capabilities and ratio analysis.

“We’re putting more meat on the bone and looking at including some of the metrics we’ve been using internally,” Gorzycki said in reference to enabling users access to a new type of volatility analysis.

“We plan on showing that as a histogram so someone can pull up a given asset — Apple, Tesla, whoever — and actually see the previous 1,000 days plotted on what ultimately ends up looking like a distribution curve.”

The end result enables users to understand whether a stock is experiencing some tail event, such as that caused by the 2021 retail investing craze.

“Along with that, we’re looking at given correlations over a similar timeline,” Gorzycki added. “We also have come up with our own version of [behavioral] ratings ... that we present to our members where they can see where we think an asset lies on a day-to-day basis.”

To learn more or sign up for OVTLYR, click here.