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Tesla and two other surging tech stocks have even more room to run, technician says

VIDEO3:2103:21
Tesla and two other surging tech stocks have even more room to run: technician

Technology continues to dominate the market this year.

It is the best-performing sector so far in 2018, up 14 percent and massively outperforming the broader market, which has risen 4 percent in the same time period.

As tech stocks continue to surge with many sitting near record highs, one technician says there are three names in particular that have even more room to run.

"I hold positions in all three, and I think there are some interesting levels that will act as a traction," Todd Gordon, founder of TradingAnalysis.com, said Thursday on CNBC's "Trading Nation."

The media monster

First, Gordon pointed to media behemoth Netflix.

Taking a look at a short-term chart of Netflix, Gordon explained that there have been a lot of good trends. Using the Elliott Wave Theory, he said that Netflix's stock is currently in the third wave and looks poised to break through $400. The theory is the idea that stock prices typically move in five waves. According to the theory, after a big run-up, a stock will see a correction and fall down to support before bouncing back upward toward resistance.

In Netflix's case, the shares are making a move up toward the top of the uptrend channel, according to Gordon. "You're looking at a $415 target."

Netflix's stock has rallied more than 100 percent in 2018 and is currently sitting about 1 percent from its all-time high.

Chip rip ahead

Next, Gordon took a look at chip giant Nvidia.

While it is "not as strong of a chart as Netflix, it certainly looks solid," he said.

Using the Elliott Wave Theory again with Nvidia, Gordon said that much like Netflix, the stock is currently in its third wave and making a move up toward the upper end of the channel.

Gordon illustrated that if you calculate the stock's distance traveled in the first wave, it oftentimes makes a similar move in its third wave. In this case, "I think Nvidia's got $300 in the tank."

Nvidia shares were trading around $265 midday Friday.

Tesla's comeback

Lastly, he broke down Tesla.

According to Gordon, the stock looks extremely appealing from a technical standpoint. "Tesla on the weekly chart looks amazing ... we've got some beautiful symmetry," he noted.

Looking at a long-term chart of Tesla, Gordon explained that recently the stock fell more than 30 percent after big rallies. Coming off of the most recent bear market, "now I'm looking for upward extension in Tesla towards $400." A bear market is when a stock falls 20 percent or more from its high.

Then concentrating on a shorter-term chart, "we have broken resistance and now that serves as support. It is the launching pad to stay above that level, so we should be able to move up," Gordon said.

Tesla has surged more than 25 percent so far in June and is on pace to close out its best week since February 2016.