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Tesla has something more dangerous to deal with than its cars: Strategist

Talking Numbers

Tesla shares drop on news of another fire. But, with the stock down around 20% since last September, is it time to take profits?

Tesla shares were down more than 4% on Thursday following reports of a fire related to the Tesla Model S. The company released a statement Wednesday saying:

"Based on our inspection of the site, the car and the logs, we know that this was absolutely not the car, the battery or the charge electronics. There was a fire at the wall socket where the Model S was plugged in, but the car itself was not part of the fire."

(Read more: Tesla charging system may have started garage fire)

This is the fourth report of a Tesla-related fire in the past three months. With the stock down around 20% since last September, is it time to take profits?

On CNBC's Street Signs' Talking Numbers segment, Brian Kelly of Brian Kelly Capital says investors should be looking to add to their Tesla positions, not get out.

"It's a buying opportunity here," says Kelly. "The [Tesla owner in question] plugged in too many Christmas lights, he burnt out his wall socket, and they're blaming it on Tesla. It's crazy."

For Kelly, buying Tesla's stock is a bet on founder Elon Musk and the rest of the company's management team.

"You have to look at the company like a venture capital-type of deal," says Kelly. "You have a management team that has a history of transformational technology. You're never going to be able to look at this with traditional metrics. Not at this point in time. But, the cars are fantastic cars. They're changing the way that automotive technology is going. So, I think down 6% on a crazy story about a light socket having a problem, it's a great buy."

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, is on the other side of that Tesla trade.

"I do agree that it's an incredible car but, the chart is actually more dangerous than the car at this point," says Ross. "I'm a seller."

(Read more: Tesla primed to expand following tax break)

Ross sees the stock price as unable to get above the key $155 resistance level despite bouncing off its 200-day moving average a few weeks ago. And, it's facing downtrend resistance along with the 50-day moving average above it. For that reason, he thinks investors should stay away from Tesla.

"There are much better buys out there on a relative and an absolute basis," says Ross. "Look at GM, look at BMW overseas – much better autos out there right now."

To see Ross' charts and Kelly's fundamental analysis on what they think is next for Tesla, watch the video above.

More from Talking Numbers:

This laggard could lead in 2014
Dr. Marc Faber’s three bold predictions for 2014
Doug Kass: This could be trouble for Apple

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