Can Tesla Stock Close the Week on a High Amid WallStreetBets Boost?

EV (electric vehicle) stocks are regularly featured among the top discussion topics on Reddit group WallStreetBets. Currently, Tesla (TSLA), which is a popular stock among retail traders, is the most popular stock on WallStreetBets. Can Reddit traders trigger a short squeeze in TSLA stock next?

Apart from Tesla, Workhorse is another EV stock that's among the top discussion topics on WallStreetBets. In the past, Nikola and NIO have also been popular among the group members. WallStreetBets has built its reputation as a short-seller killer.

In some ways, Tesla has all of the traits that make it a natural choice for Reddit traders. WallStreetBets traders think that short-sellers are “evil” and should be squeezed. TSLA CEO Elon Musk is known for its public spats with short-sellers. In 2019, he got into a spat with long-time Tesla bear David Einhorn.

Jim Chanos is another prominent Tesla short seller. Recently, Michael Burry of The Big Short fame also joined the list of Tesla short-sellers after he revealed a massive short position in TSLA stock.

Musk is known to take short sellers head-on and also launched Tesla “short shorts” in a swipe at short-sellers. He frequently takes swipes at short-sellers in his tweets. Musk hasn’t even spared the SEC, which he calls the “Shortseller Enrichment Commission."

Last year, Tesla stock short-sellers lost billions of dollars as the stock rose 740 percent. TSLA has historically been among the most shorted stocks in U.S. markets. According to the data from Fintel, over 10 million TSLA stocks were sold short on June 24, which was almost 23 percent of the total volumes. This is the highest short interest for TSLA stock that we’ve seen in over two weeks.

In 2020, Tesla split its stock to help increase the liquidity. The announcement helped support the rally in TSLA stock last year. While Tesla stock is up sharply from the levels, many investors wonder if Tesla will split the stock again.

While it looks unlikely that the company will go for a split again so soon, Musk is known to do unconventional things. It won’t be surprising if the company considers a split again after the stock crosses above $1,000.

Tesla is possibly the most popular stock on Reddit with multiple subreddits devoted to discussing the company. A post on WallStreetBets, which was upvoted over 23,000 times, talked about the possibility of TSLA stock hitting $750 this week. The user said that they are long on $790 calls.

Speaking of Tesla, it's in some ways already on the “moon” with its market capitalization twice as high asToyota Motors. While Reddit traders talk about taking stocks to the moon, they talk about taking TSLA to “Mars,” which is a reference to SpaceX. A WallStreetBets member with username BroseppeVerdi, with over 131,000 “comment karmas,” was among those talking about taking TSLA stock to Mars.

TSLA stock is looking strong on the charts. The stock has crossed above the 50-day and 100-day SMA (simple moving average). Both of these have been strong resistance for the stock, but it has managed to break above these, which signals an uptrend. With some pumping from Reddit traders and a possible short squeeze, TSLA stock looks set to continue its rally in the near term and close the week on a high.

Morgan Stanley has also reiterated its bullish rating and a $900 target price on Tesla stock, which will also help buoy bullish sentiments. The brokerage is "overweight" on TSLA stock and has termed it as a "core holding."