In today’s Talk of the Day, let’s take a look at Tesla (TSLA), which has been under heavy selling pressure for the past few months. Since December, Tesla’s stock price has plummeted from $490 to $284, a massive decline driven by multiple factors.
The primary reason behind this drop is the significant decline in Tesla’s sales, largely due to growing competition from Chinese EV automakers. The Chinese market, which was once a major growth driver for Tesla, is now dominated by domestic players, putting pressure on Tesla’s global market share and pricing power.
Currently, Tesla is testing a critical support area at $270, marked in orange on the chart. This level has acted as major horizontal support, preventing further declines in the past. Additionally, Tesla is also sitting on a long-term black uptrend line, which further reinforces this support zone as a potential bounce area.
Trading Strategy: Bounce or Breakdown?
-
A bounce from this support would offer a buying opportunity, suggesting that buyers are stepping in to defend this level. If Tesla manages to hold above $270, it could trigger a short-term recovery rally.
-
However, a daily close below the blue support area would confirm a long-term bearish breakdown, signaling further downside potential and reinforcing the negative sentiment.
Tesla is at a critical decision point, and traders should closely watch the price action around $270. If support holds, a short-term rebound could be in play, but a confirmed breakdown would suggest a deeper decline ahead.