Tesla (TSLA) - Get Tesla Inc Report stock has been on a hot streak, but not just lately. The momentum has been infectious throughout the year, with Tesla now commanding a market cap of $380 billion on Friday.
That momentum has spread to other electric vehicle stocks as well, as Nio (NIO) - Get NIO Inc. Sponsored ADR Class A Report, Workhorse (WKHS) - Get Workhorse Group Inc. Report and Nikola (NKLA) - Get Nikola Corp. Report have all done well over the past few months.
It took five trading sessions for Tesla stock to rally 40%. At Friday's high of $2,081.68, Tesla stock was up more than 51% in the last eight trading sessions. Momentum from last week carried into this week after Tesla announced a 5-for-1 stock split.
Watch Jim Cramer & Rob Maurer discuss TSLA stock, Elon Musk, and Battery Day
Over the last three months, Tesla stock is up more than 150%. From the March lows, shares are up an astounding 493%. If that feels too cherry-picked, just realize that Tesla is up 390% year-to-date and more than 800% over the past 12 months.
So just how far can this thing go?
Trading Tesla Stock
I have been bullish on this name since its June breakout. That came as shares cleared the double-top in February and began finding $900 as support rather than resistance.
My longer term target has been the 261.8% extension, up at $1,969.69. Not many were looking for a possible run toward $2,000. But after closing above it on Thursday, it's got investors wondering just how high this name can go.
Bears championing for a correction based on fundamentals seem to have missed the point. Fundamentals haven't driven Tesla stock this high — to a near-$400 billion market cap — so they're unlikely to be the stock's demise. Instead, it's simple market psychology driving this name.
At $2,000 per share, a 5-for-1 split will put Tesla at $400. I don’t want to get ahead of our skis here, but a run to $500 then may not be out of the question, particularly if Tesla can hold onto some of this momentum.
That would be $2,500 in a pre-split world. Along the way, don't forget about the three-times range extension near $2,205, while the 361.8% extension comes into play at $2,588, for those wondering.
That said, sometimes investors buy in ahead of a stock split and then we see a “sell the news” reaction afterwards. If that’s the case, bulls would love to see support come into play at the 10-day moving average, followed by the $1,650 to $1,700 area. This zone was resistance in July.
Below could potentially send Tesla stock tumbling a bit, perhaps down to the 50-day moving average and even $1,350.
Eventually this run in Tesla stock will end and I'm certainly not pounding the table here calling it a "buy, buy, buy!" However, I’m not ready to bet against Tesla yet, as there has been little success in trying to pick the top in this one.