Tesla Stock Charging After Big Upgrade

TSLA shorts have been heading for the exits

The shares of Tesla Inc (NASDAQ:TSLA) are up 3.5% to trade at $375.93, after Jefferies upgraded the electric car maker to "buy" from "hold," while boosting its price target to $450 from $360 -- a 24% premium to Thursday's close. The analyst in coverage believes the company will continue to "stand out" next year, and applauded Tesla's strengthening balance sheet. Jefferies added that CEO Elon Musk's "erratic behavior makes us wonder if he might be considering reducing his direct involvement in Tesla to focus on product/vision/other ventures," which the analyst says would benefit the company.

Since bottoming around $250 in mid-October, Tesla shares have fought back to add 50%, with pullbacks neatly contained by their 30-day moving average. TSLA is now on track for its fifth straight win, and on Monday broke north of the $360 area after spending roughly five weeks consolidating below this level. The stock is pacing for its highest close since early August, just after the notorious Musk tweet about taking Tesla private.

Shorts have been heading for the exits, with short interest falling 15.5% in the last two reporting periods. While the 28.79 million shares sold short is the lowest amount since mid-March, it still represents a whopping 22% of TSLA's total available float, and 3.1 times the average daily trading volume.

Meanwhile, Tesla's Schaeffer's put/call open interest ratio (SOIR) of 2.01 registers in the 83rd percentile of its annual range. This suggests near-term options traders are much more put-heavy than usual right now. Should TSLA extend its recent uptrend, an unwinding of pessimism in the options pits could help propel the security forward into 2019.