Tesla (TSLA) has had a phenomenal run this year, with its stock doubling in just a few months and now up over 70% YTD.
But with the price now sitting above $415 and over 40% away from its 200-day moving average, the question traders and investors are asking is: Is it still a good buy?
From a technical perspective, Tesla has stretched itself significantly, much like it did in past surges. Historically, when a stock moves too far too fast, we often see a pullback or consolidation before the next leg higher.
In Tesla’s case, the stock’s distance from its moving averages is reminiscent of earlier periods where corrections followed.
The fundamentals paint an even more interesting picture. Based on discounted cash flow (DCF) models, Tesla’s fair market value is estimated at just $90. That’s a stark contrast to its current price around $425 as of Friday afternoon.
While we can argue that DCF models don’t always account for Tesla’s innovation or its broader role as more than just an auto company — encompassing energy, technology and disruption — it’s still worth noting that this valuation disparity raises concerns.
My Strategy for Tesla
Right now, I’m not chasing Tesla at these highs. Buying into at level feels like stepping into no-man’s land, especially as the broader market faces low volume and the potential for catalysts like the Federal Reserve’s upcoming meeting are few and far between heading into year-end.
Instead, I’m focusing on building a position at more reasonable levels — and if I have to patiently wait, so be it.
For example, I’ve set pending buy orders at $362.50 for my first position, and $285, the election breakout, for a second — areas where I see technical and psychological support.
These levels allow me to start small and dollar-cost average into a position without exposing myself to unnecessary risk. At $362.50, I’ve allocated $1,100 to buy three shares, and at $285, I’ve allocated $1,500 to buy five shares.
This approach allows me to stay flexible.
If Tesla pulls back to these levels, I’ll have a chance to buy at a discount. If it doesn’t, I’ll sit on cash and wait. I’m not interested in chasing a stock that’s stretched beyond reason — patience is the key here.
For those looking to trade Tesla in the near term, I’d stay away. Instead, consider defined-risk strategies like credit or debit spreads if you want to participate without committing significant capital.
Tesla and the Road Ahead
Tesla’s momentum isn’t just about its cars — it’s about Elon Musk’s vision, energy innovations and the market’s belief in its ability to disrupt multiple industries.
However, history reminds us that even the most exciting growth stories need time to breathe.
So, while I believe Tesla has long-term potential — even as a $1,000 stock someday — now is not the time to be aggressive.
Wait for pullbacks, protect your downside, and trade with a clear plan. The opportunities will come, but only for those who are prepared.
As we move into 2025, the clean slate of a new year offers a chance to reset expectations and focus on trading what you see, not what you hope for. That’s the best way to stay ahead.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
The Fed has been trying to keep the economy afloat. From the numbers they’re looking at, they think the progress they’ve had may stall.
The question is:
What do you think happens when it does?
If you think things are bad now, how do you think the economy will be when this “progress” stalls?
We’re walking right into an even worse inflation trap, and until someone cleans this whole mess from top to bottom, things won’t get any better.
Your only option?
