These 2 charts tell you to buy Tesla: Technician

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."

This is not the first time that Tesla has had a major move followed by a 50 percent retracement. The same thing happened right before Tesla's 120 percent jump from November to February.

At this point, Tesla's chart really appears to be approaching a make-or-break moment. Not only did Tesla bottom in April at just about its 2013 high, but the stock has traded into a tight "wedge" formation.

"We have a well-defined series of higher lows, lower highs, you can call it a wedge, you can call it whatever you want," Worth said. "It's tension, and it gets resolved by news. The news is earnings—now you make your bets. We think the resolution is up and out."

Worth is targeting a move up to $225. And to make a bullish bet using options, Michael Khouw of Dash Financial recommends buying the September 215/255 call spread for $12.50.

Read MoreTesla most shorted amid Nasdaq selloff

But the technical picture isn't enough to convince Dan Nathan of

"This might be the last mania stock to break, but it's going to break eventually," Nathan said. "And listen, don't be fooled by the charts. I looked at it, too. If I didn't know what it was, I'd say that looks like a great, great, chart. But it's a dangerous one, too. If there is anything for people to shoot at, I mean, this thing is down $50 in a quick."

Disclosure: Carter Worth does not hold any position in shares of Tesla.

Follow the show on Twitter @CNBCOptions.

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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