Tesla Motors Inc. (NASDAQ: TSLA) has been a stock on fire. Shares gapped up to yet a new all-time high at $97.12 on Tuesday after earnings. Now shares are in the red with a drop of 3% to $85.00 on about eight-times normal trading volume with more than 34 million shares having traded up to the last hour of trading. While stocks can rally and rally above and beyond logic, this very well may have marked a near-term trading top for Tesla’s stock.

While we are saying that the Tesla rally is over, there has to be an admission that timing and illogical behavior can often prevail over common sense even if that may just be temporary. We have seen a serious concern on the chart, the short sellers have likely been squeezed out, and a key analyst jettisoned the stock $20 ago. What you should not consider a peak is the move toward electric, hybrid, and better fuel-efficient vehicles.

The stock had a huge gap-up at $94.39 this morning after earnings, with a very early morning peak of $97.12. A huge volume sell-off down to $85 and with shares in the red is representative of what cocktail market technicians would call a “gap and crap” pattern.

When this happens at a record share price and on monstrous trading volume (8+ times volume is that), you are often seeing a top. Keep in mind that Tesla was under $60 just on May 8, then on May 9 you had close to a $14 rally, followed by another $7 rally, followed by another $11 rally. Another $9 higher just proved to be the breaking point.

Another issue is Tesla’s short interest. This has been in decline in the last three twice-monthly reports, but the NASDAQ short interest tables shows that Tesla still had 27.5 million shares short as of the April 30 settlement date and Tesla’s stock was around $50 in the days leading up to the end of April.

Goldman Sachs recently downgraded Tesla to Neutral from Buy after the valuation reached a highly elevated level. That was on May 9 on the day that Tesla was gapping up to $70. At $85 Tesla’s market cap is still about $9.7 billion, while Thomson Reuters has estimates on sales of $1.93 billion in 2013 and $2.54 billion for 2014.

There is a concern in options trading. Call options trading volume is still outpacing put option volume. That may be one caveat out there, unless new buyers are selling contracts to hedge their long or short positions.

We do not have other electric car players to value Tesla against. Ford Motor Co. (NYSE: F) is supposed to be the safest car company in America. Ford’s market cap is $56 billion and sales projections from Thomson Reuters are $136 billion in 2013 and almost $143 billion in 2014. General Motors Company (NYSE: GM) has a market value of over $43 billion and Thomson Reuters has sales estimates of $155 billion for 2013 and $165 billion for 2014.

For trades at about 0.4-times a 2013-14 blended sales, versus about 0.27-times 2013-14 blended sales for GM. Tesla trades at about 5-times 2013 sales and about 4-times 2014 sales. The forward P/E ratios are too out of proportion to even bother discussing, but the forward multiples for 2014 earnings are roughly 78 for Tesla, 8.5 for Ford, and about 7.25 for GM.

Have you seen the all-time high in Tesla shares? Very possibly, no. Tesla is positioning itself to be the de facto electric car leader in America (and maybe beyond) and ultimately that can drive much much higher raw dollars in valuation. We have just seen too many valuations get stretched to the point that they did not make sense and we have to wonder what year in the future that investors are buying Tesla shares up for up until today.

There is a major bull market underpinning the speculative favorites and that supports Tesla. Still, if Goldman Sachs couldn’t stomach the valuation almost $20 lower and the blow off top that we saw today are of any use, Tesla still has much more risk than reward for investors who do not like the moral hazards of chasing stock prices endlessly higher each day.

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