TradingAnalysis.com's Todd Gordon is betting against a Tesla (TSLA) - Get Report rally ahead of its after-market earnings report Wednesday, he said on CNBC's "Trading Nation."

Gordon said he's hedging his position in Tesla, which is "underperforming" on a technical basis going into earnings. Gordon has previously called it one of his favorite picks, but the stock's gradual drop toward a "support" line near $318 has Gordon "taking a directional bet to hedge [his] longer-term position in Tesla."

The options market is implying a $22 or 6% move in either direction for Tesla stock, Gordon said. He wants to sell the Aug. 4 weekly 335-strike call and buy the Aug. 4 weekly 340-strike call.

If Tesla stock closes above $340 on Aug. 4, Gordon will lose the maximum $375. But he said Tesla's Tuesday closing price of $319 accounts for the possible $22 increase and makes his bet a strong one with about an 80% chance of succeeding.

Tesla stock traded down 2% to $317.05 on Wednesday morning.

Watch: Tesla's Elon Musk Is All Jokes as the Model 3 Accelerates Into 'Production Hell'

Watch More with TheStreet: