Todd Gordon, founder of TradingAnalysis.com, sees several tail winds that should carry the stock back to record highs. First, 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 pointed 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 just 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 fall into a little bit of a triangle consolidation,” he said Thursday. “A triangle is nothing more than lower highs, higher lows. … We reach a point of decision where the chart must break out and usually it breaks in the direction of the trend that was in place prior to the consolidation.”
“We might have one more push higher in Tesla before we see more significant profit-taking but I certainly see room up towards the $500 region there in Tesla,” Gordon said.
Gordon is using the options market to define risk and putting on a trade that takes the stock through expected volatility around the U.S. presidential election. He is buying the 450 call with Nov. 20 expiration and selling the 500 call. A move to $500 implies 16% upside.
Disclosure: Gordon holds TSLA.
Read More: Tesla stock could be on its way to $500, trader says