Although its shares hit a low at $303.26 on May 23rd, Tesla Inc.’s (NASDAQ:$TSLA) shares came back with a 21% rise over the past 11 trading days. Year-to-date, the automaker’s gain is at a rather impressive 73%. As a result, for the past few weeks, short investors who have been betting against Tesla suffered some major losses. Still thinking about taking a short position on Tesla stocks? Think again.

Founder of Tesla, Elon Musk, noted the situation by tweeting a link to an Investopedia article titled, “More Bets Against Tesla Than Any Other Company” with the caption, “Could be worse”. Another tweet followed shortly, “These guys want us to die so bad they can taste it.”

At the end of last week, S3Partners reported that there was almost a $10 billion short interest in Tesla’s stocks. A tweet on June 7, 2017 from Ihor Dusaniwsky updated that number to $10.4 billion, along with a report that the 5% rise that occurred the same day cost shorts $534 million in mark to market losses.

With the strong belief that Tesla’s stocks will go down drastically amongst investors, many are baffled at Tesla’s continuing rising streak.

A Look at Tesla in Numbers

After analyzing Tesla’s stock chart in a technical manner, it can be seen that the stock is now heading to incredibly high overbought levels, with a nine-day relative strength index (RSI) going over 80. This strongly suggests a recent short term top, particularly when a 21% 11 day rally is involved.

Bullish analyst Ben Kallo of Baird is now even predicting a scenario in which the Tesla stock reaches $566, with his price target of $368 now exceeded. This seems overly-optimistic as the average price target set by Tesla stock analysts is around $275 — but could anything happen at this point?

Although short investors are losing money and Tesla’s stock continue to climb, investors should still practice caution. Higher prices tend to lead many investors into comfort and security — but as we all know, the market is unpredictable. As such, some investors have been questioning the faith of the Tesla stock, and whether or not people will lose that faith. Perhaps this is why many investors views the Tesla stock as bearish.

TSLA Stock Trade Idea

Buy Tesla stock at its current price of around $370 puts at $8.20 or better. The puts cost only 2.2% of the $370 closing price of the Tesla stock, thus it won’t take a lot to get them to be profitable.

Featured Image: twitter