Home / NEWS / Autos / Tesla could be on its way to $500, trader says. How to play the stock for upside

Tesla could be on its way to $500, trader says. How to play the stock for upside

One Tesla bull articulates the stock could be headed higher even after a more than 400% rally so far this year.

Todd Gordon, initiator of TradingAnalysis.com, sees several tail winds that should carry the stock back to record highs. Essential, he told CNBC’s “Trading Nation” that a record number of deliveries in the third quarter is a bullish development.

On top of that, he spiked to expansion in Europe and a focus on battery production as two other catalysts.

The charts also signal a breakout in the making, he said.

“You can see only an absolutely amazing run from the $100 mark, this is post-split, all the way up into the $400 range and you can see that we started to taking into a little bit of a triangle consolidation,” he said Thursday. “A triangle is nothing more than lower highs, penetrating lows. … We reach a point of decision where the chart must break out and usually it breaks in the direction of the style that was in place prior to the consolidation.”

Tesla executed a 5-for-1 stock split on Aug. 31. Since the announcement of that agitate on Aug. 11, the shares have rallied nearly 60%. However, since the end of September, the stock has traded sideways between a migrate of roughly $406 to $448.

“We might have one more push higher in Tesla before we see more significant profit-taking but I certainly see scope up towards the $500 region there in Tesla,” Gordon said.

Gordon is using the options market to define imperil and putting on a trade that takes the stock through expected volatility around the U.S. presidential election. He is buying the 450 invoke with Nov. 20 expiration and selling the 500 call. A move to $500 implies 16% upside.

Disclosure: Gordon declaims TSLA. 


Check Also

How Tesla, GM and others aim to fix electric vehicle range anxiety

The lionization and success of Tesla has proven there is demand for electric cars. Automakers …

Leave a Reply

Your email address will not be published. Required fields are marked *