Tesla Inc. ( TSLA) is perhaps the most recognized electric vehicle name around. The company has many fans, but there are also investors who were disappointed with Tesla's first-quarter results and their profit margins.
Short interest has jumped to 95.010 million shares in the latest report from 88.570 million (source www.shortsqueeze.com). Like any trading idea it can be right or it can be wrong. Let's check out the charts of TSLA to see if the shorts might be forced to cover their trades at higher prices.
In this daily bar chart of TSLA, below, I can see that TSLA made a strong rally in January and February. Prices stopped short of the underside of the declining 200-day moving average line in February and moved lower into March. Another bounce in late March also stopped short of the 200-day line. TSLA made a lower low in the month of April. Trading volume has diminished the past three months or so as prices have declined and this is a minor positive -- traders are not heavy liquidators of longs. The On-Balance-Volume (OBV) line has held up better than the price action. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal. 
In this weekly Japanese candlestick chart of TSLA, below, I see a bottom reversal pattern in April. Bottom reversals can be a turn to the upside from a decline or a turn sideways from a decline. TSLA is still below the declining 40-week moving average line. The weekly OBV line is still up from a low at the beginning of the year. The MACD oscillator has narrowed and still stands below the zero line.
In this daily Point and Figure chart of TSLA, below, I can see a potential upside price target in the $191 area. A rally $191 would improve the technicals and could well prompt some short-covering.
Bottom line strategy: The increased short position in TSLA could be a temporary hedge, a pairs trade, or something else. Either way, I see it as potential fuel for a rally in the days ahead.
