4 reasons to be cautious into Tesla earnings

As a company linked to crude oil prices, Tesla Motors has endured a remarkably volatile three months. Shares of the electric car maker hit a high of about $260 per share last November, only to dip to about $185 per share in January and mount a rally into February that left it just below $220 per share at Friday's close.

Wall Street is puzzled going into Tesla's fourth-quarter earnings announcement on Wednesday, and CNBC "Fast Money" trader Guy Adami called the results "a coin flip." Adami and other "Fast Money" traders stressed caution ahead of Tesla earnings.

The Tesla Model S electric car.
Tesla Motors
The Tesla Model S electric car.

The stock has "ripped" recently, said trader Brian Kelly. Despite the surge, he wouldn't take any "large position" in Tesla.

"If anything maybe you can buy some calls if you think it's going up. I would much rather buy this on a pullback," Kelly said.

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Adami also advised against taking a "huge position" because of the uncertainty surrounding earnings. Trader Tim Seymour added that "the Street doesn't know what they're going to do."

He argued that investors should wait for the stock to slip lower before jumping into the stock.

"It breaks [$180 per share]. In the meantime, that is where you play for," Seymour said.

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Trader Steve Grasso noted that if earnings disappoint, shares could quickly fall below $200.

Disclosures:

Tim Seymour

Tim Seymour is long AAPL, BAC, BX, C, DIS, F, GE, GM, GOOGL, INTC and SUNE. Tim's firm is long BABA, BIDU, CCU, DSKY, FCX, KNDI, LUKOY, MCD, NKE, NOK, SINA, SBUX, TSL and VIP.

Steve Grasso

Steve Grasso is long AAPL, BA, CLVS, EVGN, FB, GDX, GOOGL, IMMR, KBH, KDUS, MHY, MJNA, NVIV, PFE, POT, SO, T, TMUS, TWTR and YHOO. His firm is long AMZN, FCX, NE, NEM, VALE, RIG and OXY. His kids are long EFG, EFA, EWJ, IJR and SPY.

Brian Kelly

Brian Kelly is long BTC=, U.S. dollar, CTRL calls, HYG puts, BBRY call spreads and TLT. He is short EWA, EWG, EWQ, EWZ, EWW, Australian dollar, British pound, Canadian dollar, yen and Yuan. Today, he bought TLT.

Guy Adami

Guy Adami is long CELG, EXAS and INTC. Guy Adami's wife, Linda Snow, works at Merck.