Tesla shares have risen by 7% for the third day in a row. This increase follows Elon Musk’s purchase of $1 billion in shares, significantly boosting the value of his investment. Analysts expected a technical breakout after the shares climbed above May’s high and showed a pattern of higher lows. This upward trend aligns with a broader market context, highlighted by a 40% jump in Oracle shares, signaling caution for those betting against tech companies. Tesla’s stock is now nearing last year’s high of almost $488. The market seems less focused on traditional metrics, instead concentrating on momentum, particularly around full self-driving and robotics. At this moment, auto sales, profit margins, and earnings appear to be secondary. The current trend shows how powerful narratives and market sentiment influence share prices. The breakout above May’s high is the strong bullish signal we anticipated, and it’s materializing. With the stock price climbing, momentum is the primary concern, so we should prepare for further gains. Traders in derivatives should concentrate on bullish strategies in the coming weeks. Elon Musk’s recent share acquisition is driving this surge, proving that the current rise is more about his vision than vehicle sales data. The market is favoring the narratives of full self-driving and robotics, meaning traditional fundamentals can be overlooked for now. This positive sentiment is visible in the options market, where call option volume has spiked by over 150% from the August 2025 average, reaching more than 2 million contracts daily. This surge in speculation can lead to a short squeeze. Notably, the latest report from the Bureau of Economic Analysis showed a small 0.2% drop in U.S. auto sales last month, further illustrating the disconnect from fundamental data. This situation resembles the meme stock rallies of 2021, where stocks strayed from reality for long periods. Historically, attempting to short such strong, narrative-driven momentum has proven to be a costly misstep. The easiest path forward seems to be upward toward last year’s peak of about $488. With implied volatility in near-term options exceeding 80%, buying calls outright has become quite pricey. Instead, we should consider using call debit spreads to lower entry costs and manage risk. This approach allows us to benefit from further gains while safeguarding against volatility if the rally loses steam.

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