Elon Musk's $420 level may not be such a pipe dream for Tesla stock, technician says  

Tesla's board just got new leadership.

The appointment of longtime board member Robyn Denholm to chairwoman sent shares higher on Thursday. The stock move briefly boosted share prices to levels seen before CEO Elon Musk infamously tweeted that he had "funding secured" to take the company private at $420 a share. The unfounded post cost him a $20 million fine and the chairman's seat.

Todd Gordon, founder of TradingAnalysis.com, says the charts suggest Musk's $420-a-share valuation may not be such a pipe dream.

"I think if we hold the bid, and I think we will, the $389 high is in jeopardy and we should be able to get up to Elon's $420 on the breakout," Gordon said on CNBC's "Trading Nation" on Thursday. "I'm going to try to play this on the long side."

A move to $420 represents nearly 20 percent upside from Thursday's closing price of $351.40

Tesla peaked at $389 in September 2017. Musk's Aug. 7 tweet pushed the stock close to that level again before losses sent it back to the year's lows.

Gordon says past weakness on the charts give him reason to believe the sell-off in recent months is a pullback before a pop. From its peak in April 2016 to a trough in June 2016, its stock pulled back around 34 percent. Another decline from September 2017 to February 2018 marks a 37 percent decline. The stock rebounded from both of those sell-offs.

"There's actually a lot of rhyme and rhythm and repetition in this chart," said Gordon. "We're seeing a very clean setback, kind of corrective within an uptrend."

The shift in board leadership has not changed one vocal Tesla bear's position.

"It's great that there's a new chairman in place for checks and balances, but the choice does not ease my concern about the instability of management," Mark Tepper, president of Strategic Wealth Partners, said on "Trading Nation" on Thursday. "Robyn has been part of the Musk team for quite some time. She's a Musk loyalist."

Denholm has been a member of the Tesla board since 2014. She has left her role as chief financial officer of Australian telecom Telstra to focus on her new position at the electric car maker.

"That suggests to me that she might not be the best person to keep him in check. I think he needs a better babysitter, so we're still staying away," he added.

Tesla shares are up 13 percent so far this year, but have dropped 9 percent from their 52-week high.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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