Tesla is under pressure again this week, but TradingAnalysis.com founder Todd Gordon says that spells opportunity for savvy investors to build out a position.
Speaking with CNBC's "Trading Nation" on Thursday, he said the long-term prospects for Tesla look strong and he predicted that CEO Elon Musk's electric vehicle maker will marry with his space exploration company SpaceX to give it a cutting-edge advantage in the space.
"Tesla, with its efforts in space with SpaceX, with Starlink, they just launched another mission, ultimately I think the game will be won when global internet connectivity from the sky links all the Tesla's fleet whether it's taxis or individual passenger cars, so I think Tesla is going to control it," he said.
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On a shorter-term basis, Gordon said its technical setup points to upside.
"I think we might have … a little bit more consolidation through the summer before we ultimately move higher. I think, however though, that the lows are in place with Tesla and I think the reward is very large compared to the risk," said Gordon.
That bullish outlook changes if Tesla breaks below $545 a share, but Gordon does not expect that. It closed Thursday at 572.84.
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Gordon sees two ways to play its pullback. The first, he said, is to buy the stock outright and add a stop order at $550.
The second is to look to the options market. He targets a retest of its $700 region heading into earnings expected late July or early August.
"A trade you can do is do a call spread, buying the 650 strike call in those July [16] monthly expirations, selling a 700 call, a $50 spread for which you will pay $11.20," said Gordon. "I have $1,100 roughly of risk to make 3800. Really good reward-to-risk ratio."
Tesla shares are down nearly 20% in 2021. It has pulled back 36% from its late January peak.
Disclosure: Gordon holds TSLA.