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Why this could be the top for Tesla

Traders are getting charged up about Tesla's prospects, but both the technicals and fundamentals may indicate the stock is close to reaching its top.

Shares of the electric car maker gained 6 percent on Monday in anticipation of the line of storage batteries Tesla is set to unveil on April 30.

The bulls were particularly emboldened by a note from Deutsche Bank analyst Rod Lache, who wrote: "Based on the preliminary work on the economics of Stationary Storage, we believe that this has potential to be more significant than the Street expects."

Lache estimates that the Stationary Storage batteries will add as much as $5 per share in earnings by 2020, adding roughly $100 per share in value.

But some on Wall Street are not so enthusiastic about Tesla. Erin Gibbs, equity chief investment officer at S&P Investment Advisory Services, maintains that the stock is already fully valued. She says Tesla is already trading around 400 times its forward earnings estimates as it is.

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Tesla showroom
Scott Mlyn | CNBC

"The estimates have come down from $2.81 for 2015 just four months ago down to 48 cents," she notes. "That's an 83 percent reduction."

Gibbs, who has over $16 billion in assets under advisory, says the stock is too close to the consensus price target of $267 per share to compensate for risk. Shares closed at $231.55 on Monday.

The technicals should also give traders reason to hesitate before buying shares, according to the chart work of Todd Gordon, founder of TradingAnalysis.com. Though he sees short sellers getting squeezed around current levels, Gordon expects shares will come up to resistance near Wall Street's consensus price target.

"There's a lot of wood to chop around the $265 level," he said. "That was the high back in early 2014."

Meanwhile, prices in the options market indicate a slightly lower target than that when the Tesla releases earnings, set for May 6.

"Option markets are pricing about a $20 move" from current levels, Gordon said. "So we have resistance at $255 according to options and $265 according to the technicals. Above there and I'm interested. But in the near term, it has a lot to prove."

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