Can Tesla's Stock Continue Revving After 50% Rally?

Shares of Tesla Inc TSLA are higher by more than 50% in the past three months, and one expert says the gains are coming too much and too fast.

The Piper Jaffray Chart Pro

Tesla's multiyear chart shows that Tesla's stock has for the most part traded between roughly $240 and $385 per share, Piper Jaffray senior technical research analyst Craig Johnson said during a recent CNBC "Trading Nation" segment.

But the very quick move from the lower end of the band in early October makes the stock overbought on a short-term basis, the analyst said. 

Johnson said he is now looking to take money out of the stock at current levels and wait for shares of Tesla to revert back to the lower end of the trading range at $290 or below before becoming a buyer. 

Cybertruck A 'Sideshow'

Tesla's recent momentum in part can be traced to the large number of pre-orders for the upcoming Cybertruck.

This is merely a "sideshow," as consumers can reserve a truck for just $100, Michael Binger, president of Gradient Investments, said on the "Trading Nation" segment.

Investors may want to wait to see if the truck is a "big hit," but will need to wait until 2022, which is a "long way off."

In the near-term, there are some encouraging indicators for the stock, Binger said.

For example, revenue is projected to grow by at least 20% for the next few years, and 2020 could be a year of positive earnings, he said.

In 2021, EPS could come in at $10 per share and Tesla's cash flow could come in at as much as $2 billion. 

"It's a growth story, it's outside of the tech and the cloud computing area, so, below $300, I would certainly be willing to take a look at it," Binger said.

Tesla shares were trading up 0.11% at $335.25 at the time of publication Tuesday. 

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Photo courtesy of Tesla.