Tesla is headed to $1,000, trader says. Here's one way to ride the rallyVIDEO3:4803:48Tesla could be headed for more gains after triple-digit rally this yearTrading Nation
Tesla shares have raced nearly 110% higher this year, and they could be gearing up for an even bigger rally.
Ascent Wealth Partners managing director Todd Gordon said more measured leadership at Tesla should give the stock even more momentum.
"We like the name," Gordon told CNBC's "Trading Nation" on Thursday. "We think [CEO Elon Musk] has picked up a little bit of credibility here following the first launch of a privately funded space mission. This opens up all sorts of possibilities in terms of future exploration programs out of NASA so very interesting there and he seems to be a little bit more measured in his tweeting."
Upcoming earnings might also give the stock the thrust to push through the $1,000 mark – the shares currently trade at $875.
"Last quarter, Tesla crushed earnings," said Gordon. "We have earnings coming up here on July 22 so we still have a little ways to go. But if we take a look at the chart here, it's a very interesting technical formation."
Gordon sees an inverse head and shoulders pattern formed by a low surrounded by two higher lows. This suggests the reversal of a downtrend.
"It sort of sets up a trampoline or – forgive the pun -- a launch finally into that $1,000 region," said Gordon.
To take advantage of the move to $1,000, Gordon suggests buying the 1000 call with Aug. 21 expiration and selling the 1050 call. He says that $50 spread will cost around $1,300.
"What that means is a one lot, it's $5,000 max potential profit, but you have to pay for what I'm getting quoted at about $1,300. So, let's call it $1,300 to make $3,700. Certainly better than buying 100 shares for [roughly] $88,000," said Gordon.
Disclosure: Ascent Wealth Partners and Gordon hold Tesla.