The saga continues over at Tesla Inc. (TSLA) . The $60 billion electric car company is in correction-mode Friday, shedding around 2.7% of its market value as of this writing.

Short sellers are feeling energized -- and there are a lot of them. As of this writing, more than 22% of Tesla's float is being held short. But, despite today's drop and plenty of valuation reasons why Tesla shouldn't trade for its lofty $357 price tag, short sellers are probably about to get crushed. Again.

That's because the same arguments have been made about Tesla for the better part of the last decade now. Tesla has been a perennial target for shorts, even though it's obliterated just about anyone who's bet against higher prices for the driverless and electric-car innovator. And as the firm plans to unveil its electric truck next month, now is arguably one of the worst times to be short this stock.

Tesla bulls, take note: After charging 67% higher year to date, shares are teetering on the verge of a second leg higher this September. To figure out how to trade it, we're turning to the chart for a technical look:

It's not hard to spot the overall trend in shares of Tesla this year. Since the calendar flipped to January, this stock has been in a well-defined uptrend. Shares it their head on $380 resistance back in mid-June, a level that swatted shares lower again just last week. At first glance, that might seem like a negative thing for shares of Tesla, but it's not. Instead, that $380 price ceiling is actually setting up a textbook example of a bullish price setup in TSLA.

The pattern in Tesla right now, is an ascending triangle setup, a bullish continuation pattern that indicates higher ground. The pattern is formed by horizontal resistance at our aforementioned $380 price ceiling, plus uptrending support to the downside. Basically, as Tesla bounces in between those two technically important price levels, shares have been getting squeezed closer and closer to a breakout through $380.

Once that $380 level gets taken out, we've got a clear-cut indication that buyers have totally absorbed the glut of supply of TSLA shares that previously existed there. In other words, it's a brand new buy signal.

Relative strength, the indicator at the bottom of the TSLA chart above, adds some confidence to more upside in Tesla Inc. That's because this stock's relative strength gauge has been in an uptrend of its own, signaling that Tesla is statistically predisposed to keep outperforming the broad market into the end of 2017.

Tesla becomes energized with a push through $380 - and a short squeeze could add to the amperage this fall.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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