Massive Buy Sign Flashing In Magnificent 7 Stock

If one trader with an awesome track record is right, a Magnificent 7 stock is about to start a rip roaring rally that will last for some time.

Remarkably, it’s also been one of the poorest performers this year, down 4% so far against a market rally in the S&P 5oo of 20%.

The stock in question is, of course, Elon Musk’s Tesla. So what is it about Tesla now that should signal a massive rally is about to occur?

Key Points

• A 2020 Champion trader believes that Tesla has the potential to be starting a monster move now.
• In order to have more conviction in the upside opportunity, the gap the stock has entered needs to be filled and $235 per share needs to be left in the dust.
• If the stock can rise about $270 per share, a big move is likely underway in his opinion.

Is Tesla About To Pop?

Technically, last Thursday, Tesla broke above a key resistance level and that was enough to trigger one champion trader to state that it might just be the beginning of an extended move.

Oliver Kell, a 2020 US Champion Trader, who posted a 941.1% return for the year commented that Tesla was “clearing first hurdle at $235” and “still think this trade has not even really begun.”

He went on to reference a target price where he thinks the stock can really get going if it can “fill this gap and then (get) above $270.”

For evidence of his conviction, he cited the daily, weekly and monthly charge of Tesla as all lining up bullish but it seems he’ll be more certain if a key line in the sand is left in the dust as he would “really like to see 235 put in rear view.”

He also noted that this gap resistance really needs to be filled:

Credit: Oliver Kell

Is Tesla Stock a Buy?

Tesla stock has peeked above a key resistance level and entered another crucial area where a resistance gap had formed.

If the stock can keep powering higher and leave the $235 per share line in the sand behind, the strong likelihood appears to be a move upward to $270 is on the cards.

Following that, the sky may well be the limit it seems, at least if we read between the lines of what the 2020 champion trader is saying.

For risk-averse traders, some more conviction is needed before getting aggressive on Tesla now. However, those with a little more appetite for volatility may well view the current breakout as potentially the start of a powerful move.

As always, the best traders have tight stop loss limits to protect themselves if the share price turns south in a hurry and does a quick U-turn. It’s not about being right so much about riding the winners when you are right and cutting the losers when they go against you.