Why Tesla keeps going higher

Its shares areup 743% since its 2010 IPO and it's up 370% in the last six months alone. But,is Teslathe greatest investmentsince Apple or is it on its way to being one of the biggest short squeezes ofall time?

Tesla hasrecently shown that it can sell cars. Data released by the California New Car DealersAssociation show the electric car in third place behind the Mercedes E-Classand BMW 5-series in luxury and sports vehicles sold in the Golden State. With4,714 Tesla Model S cars sold in the first half of 2013, it moved more vehiclesthan fourth placed Lexus GS and fifth placed Audi A6 combined. It also outsoldsuch iconic luxury brands as Porsche, Land Rover, Jaguar, and Cadillac.

(Read more: Tesla outsells Porsche, Jaguar inCalifornia)

Though itssticker price is $70,000, Californians wealthy enough to pay up for theelectric luxury get $7,500 back in Federal tax rebates and $2,500 in staterebates. The $10,000 in taxpayer funding is intended to make Tesla a more viablebusiness. For comparison's sake, the Scion iQ electric model retails for about$15,665.

But, there'sstill the fact that the company is worth 40% of General Motors but produces a fraction of the amount of cars. And,short interest represents 32% of total Tesla shares outstanding.

(Watch: Three things that could slow down Tesla)

So, is theresubstance to the run-up in the stock or is Tesla being fueled by somethingelse?

Looking atthe fundamentals is Talking Numbers contributor Enis Taner, Global Macro Editorat RiskReversal.com. On the chartsis CNBC contributor Abigail Doolittle, Technical Strategist at The SeaportGroup.

Is Tesla a luxury of stockunaffordable at these levels? Watch Taner and Doolittle analyze the Tesla inthe video above to help you decide.


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