Tesla Motors

An auto and truck manufacturer that's trading within range of a major breakout is Tesla Motors ( TSLA), which designs, develops, manufactures and sells electric vehicles and advanced electric vehicle powertrain components. This stock is off to a hot start in 2012, with shares up over 20%.

If you take a look at the chart for Tesla Motors, you'll notice that this stock has been uptrending strong since a large spike lower in January. During this uptrend, shares of Tesla Motors have been making mostly higher lows and higher highs, which is bullish price action. Now the stock is trading within range of triggering a big breakout that could push the stock into all-time high territory.

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Market players should keep an eye on TSLA for a breakout trade if this stock can manage to take out some near-term overhead resistance at $35 a share with high volume. Look for volume on a move or close above that that registers near or well above its three-month average volume of 1.14 million shares. If we get that action soon, then I fully expect TSLA to re-test its all-time high of $36.42 a share very quickly and then potentially take that level out.

Traders should look for long-biased trades in TSLA if that breakout does materialize soon with decent or high volume. I would use some near-term support zones at $33 to $32.50 a share to key off for potential stops if you buy TSLA off weakness. If you get long TSLA off of strength, I would use a stop a few percentage points below $35. I would add to any long positions if $35 and then $36.42 are taken out with volume.

Make note that this stock sports an extremely high short interest. The current short interest as a percentage of the float for TSLA is a gigantic 52.1%. Nothing is more frightening to a short seller then being caught short a sock that's breaking out to new all-time high, so make sure to note the breakout levels on this stock for the near future.

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