Tesla may sell cars, but its stock trades more like a roller coaster. Opening the year at $150, the shares touched $265 in late February, fell as low as $184 in mid-April, and got back to $214 on Monday. Whee!
The next big move could come after Wednesday's earnings report. But ahead of the event, Sterne Agee chief market technician Carter Worth recommends getting long the shares. He says its recent outperformance compared to other high-valuation growth stocks portends more good things to come.
"Of all the things that have been tested in all quant models, relative strength is number one," Worth said Friday on CNBC's "Options Action." "And what's the stock doing? Acting well. As other tech names get pounded, from Amazon to Twitter, this thing acts like a champ. And the presumption is that there's wisdom in that good price action."
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Worth is also encourage by the specific price action on Tesla's chart.
"What's important is that we had a massive run of $150 off the November low. And we've retraced right now exactly half—$150 up, $75 down—and that retracement leaves us right back at these well-defined tops."