Tesla Stock Trade: How to Tackle a Parabolic Chart Without Chasing the Top
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By Spencer Li, CFTe · Last updated: 26 October 2026
A parabolic chart is one where the price climbs at an angle that keeps getting steeper, until the line looks almost vertical. Tesla in early 2020 is the textbook case. After trading between roughly $180 and $400 from 2017 to 2019, it went from $400 to above $900 in about two months. The useful lesson is about timing, because a parabola tends to end as fast as it rises. If you are not in, chasing the steepest part pays you the least for the most risk. If you are in, the job changes from finding an entry to planning the exit. I bought Tesla myself, and in February 2020 I recorded a video about how I screwed up the trade.
All prices below are what the stock traded at on the day. Tesla has split its shares twice since then, so today’s charts show the same moves divided by 15, and I give both.
What happened to Tesla’s stock in early 2020?
For more than two years, Tesla went up and down a lot without going anywhere. Its closes from 2017 to November 2019 ran from a low of $178.97 on 3 June 2019 to a high of $385.00 on 18 September 2017, and it spent the whole time bouncing between the two.
Then it closed above $400 for the first time on 19 December 2019, and the character of the chart changed completely.
| Date | Close at the time | On today’s split-adjusted chart |
|---|---|---|
| 19 Dec 2019 | $404.04 | $26.94 |
| 13 Jan 2020 | $524.86 | $34.99 |
| 30 Jan 2020 | $640.81 | $42.72 |
| 3 Feb 2020 | $780.00 | $52.00 |
| 4 Feb 2020 | $887.06 | $59.14 |
| 19 Feb 2020 | $917.42 | $61.16 |
| 21 Feb 2020 | $901.00 | $60.07 |
The first week of February is where it got quite insane. On 3 February the stock closed up about 20%. On 4 February it traded as high as $968.99 before closing at $887.06, and on 5 February it closed at $734.70, down 17% in a day. Anyone holding it that week felt rich, then richer, then a lot less rich, all within three trading days.
So when I sat down on 23 February 2020 to write about it, Tesla had just closed at $901.00. I ended my post with the question everyone was asking: “Will it hit $1000 next?”
What happened in my Tesla trade?
I published the video above that weekend, under the title “How to Tackle Parabolic Price Charts (Using Tesla Stock as an Example)”. In it I go through my reasons for buying Tesla stock, how I screwed up the trade, and how to approach charts like this one.
I will leave the details of the mistake to the video, in my own words from that weekend. Six years later, a tidied-up retelling would be easy to write and far less honest, because memory has a way of making past decisions look more deliberate than they were.
What I can say with hindsight is why that kind of chart trips people up, and it is the same thing I still watch for on every parabola.
Why do parabolic moves end so suddenly?
Look at the speed of each leg. From the first close above $400 on 19 December 2019 to 13 January 2020, Tesla rose about 30% in 15 trading days. Over the next 15 trading days, to 4 February, it rose another 69%. A steady trend repeats its pace. This one more than doubled its pace.
Didier Sornette and Peter Cauwels, who study financial crises at ETH Zurich, describe this in a 2014 paper on financial bubbles. They define a bubble as “a period of unsustainable growth, when the price of an asset increases ever more quickly”, following a “faster-than-exponential” path. Ordinary compounding at a fixed rate is exponential. A bubble is the case where the rate itself keeps rising.
Do the arithmetic and you can see the problem. If every leg has to be faster than the last, the line bends towards vertical, and no market can go vertical, because that would need buyers arriving at an infinite speed. So the move has to change shape at some point, and since everyone who bought the steepest leg is sitting on a fresh position, the change tends to be a sudden drop rather than a gentle drift sideways.
After 4 February, Tesla stalled. It added only about 3% over the next 10 trading days to its closing peak of $917.42 on 19 February. Then, as the March 2020 crash swept through every market, it fell to a close of $361.22 on 18 March, which is about 60% below its 21 February close in 18 trading days.
So did Tesla hit $1,000?
It did. Tesla first closed above $1,000 on 10 June 2020, at $1,025.05, and above $2,000 on 20 August 2020. Then it split its shares 5 for 1 from 31 August 2020, and 3 for 1 from 25 August 2022, which is why that same $1,025.05 shows up as $68.34 on a chart today.
Hence both camps in February 2020 turned out to be right, just at different times. The people warning that the parabola would break were right within a month. The people calling for $1,000 were right within four. The only way to collect the second outcome, though, was to sit through a 60% fall first, and very few people who buy the steepest leg of a parabola can sit through that.
If you want a calmer way to trade than chasing vertical charts, my free 15-minute swing trader checklist is the routine I run each day.
Should you sell into the strength, or let it run?
On 11 May 2026, a trader on Reddit’s r/swingtrading had a stock up sharply in days and asked: “Move your stop and let the runner run?”
It is the right question, and there is a real cost to both answers. Personally, I do a bit of each. In my weekly outlook on 7 May 2026, I was talking about Micron, a position I held at the time. I said that “huge parabolic moves” like that one “can also end quite fast”, and that I would not be surprised if there was a correction soon. So I had been trimming the position and tightening the trailing stop on the rest. Taking some off locks in part of the move, and the tighter stop lets the remainder run while giving back less if it turns.
I will concede the cost plainly, with Tesla as the example. Anyone who sold all their shares into the strength of February 2020 missed the run from about $900 to over $2,000 by August 2020. Selling into a parabola is a trade-off you make on purpose, accepting you will sometimes leave the best part of the move to someone else.
How do you tackle a parabolic chart?
There is no clever entry that makes a vertical chart safe. What changes is your position when you meet it, and there are really only three.
- You are not in yet. Chasing the steepest leg pays you the least and risks you the most. The patient choice is to let the parabola break and build a new base, or to accept that this one was not yours.
- You are in, and in profit. Plan the exit before you need it, because a parabola turns fast and nobody thinks clearly on a 17% down day. Trimming into strength and tightening your stop, as I did on Micron, is one way to do it.
- You are tempted to short the top. Be very careful. Anyone who shorted Tesla at the $780.00 close on 3 February 2020 saw it trade at $968.99 the next day, about 24% higher, before it fell. “It can’t go higher” is a feeling rather than a signal.
The same thinking applies to round numbers. My own question that February, whether it would hit $1,000, is the kind of thought that keeps you holding through a reversal while you wait for a number the chart never promised you. Tesla did reach $1,000, but only after a fall that would have shaken out most people waiting for it.
If you trade the turn rather than the climb, the reversal shapes that often follow a parabola are in my guide to the tower top and tower bottom. The mechanics of a stop that follows price up are in what a trailing stop loss is.
FAQ
What does it mean when a stock goes parabolic?
The price stops rising at a steady angle and starts curving upward, with each leg faster than the last. Tesla rose about 30% in 15 trading days from 19 December 2019, then 69% in the next 15.
How do parabolic moves usually end?
Sharply, more often than gently. After closing at $917.42 on 19 February 2020, Tesla fell to $361.22 by 18 March 2020, a drop of about 60%.
Did Tesla hit $1,000 in 2020?
Yes. It first closed above $1,000 on 10 June 2020, at $1,025.05, about four months after the question was being asked, and after its 60% fall in March.
Why does Tesla’s 2020 chart show about $60 instead of $900?
Tesla split its shares 5 for 1 from 31 August 2020 and 3 for 1 from 25 August 2022. Today’s charts divide earlier prices by 15, so the $901.00 close on 21 February 2020 shows as $60.07.
Should I buy a stock that has gone parabolic?
That depends on your plan, and this post is education rather than a recommendation on Tesla or any stock. Buying the steepest leg with no plan for the turn is the riskiest way to approach one.
Have you ever held a stock through a parabolic run, and did you sell into the strength or let it run? Let me know in the comments.
The wider family of reversal patterns is in my guide to trading price chart patterns, and my free trading guides collect the rest.
And if you want a routine that keeps you away from the vertical part of the chart, grab the free 15-minute swing trader checklist.
About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.
Education, not financial advice. Synapse Trading is not licensed by MAS to advise on investment products. Trading carries risk of loss, and past performance is not indicative of future results.
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Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.
