Tesla (TSLA) shares began the new month with a positive surge on Tuesday, offering a glimmer of hope to investors after a challenging first quarter. The electric vehicle manufacturer, a prominent member of the Magnificent Seven group of tech stocks, significantly underperformed its peers in the first three months of the year, shedding more than a third of its market capitalization.
The company faced a brutal start to the year, marked by a prolonged nine-week streak of weekly losses at one point during the quarter. This downturn saw Tesla become one of the worst-performing stocks within the S&P 500 index, ultimately closing the quarter down by 36 percent. Several factors contributed to this decline, including reports of falling sales, public reaction to CEO Elon Musk’s increased political commentary, particularly concerning the Trump administration, and broader market uncertainty regarding potential tariff impacts on its global business.
However, Tuesday brought a reprieve, with Tesla shares climbing nearly 4 percent to close the trading session around the $268 mark. This upward movement comes just ahead of the highly anticipated release of Tesla’s first-quarter vehicle delivery data, expected on Wednesday. Market sentiment remains cautious, as analysts widely predict the report will show sluggish overall delivery numbers, following reports of sharp sales declines in key European and Chinese markets during January and February.
From a technical perspective, Tesla’s stock chart tells a story of significant volatility. After reaching a record high in mid-December, the shares entered a pronounced downtrend that characterized most of the first quarter. Technical analysts observed that this decline followed a classic Elliot Wave pattern, unfolding in five distinct downward swings.
More recently, an attempt by the stock to rally encountered significant selling pressure near the 200-day moving average, a widely watched technical indicator. Concurrently, the Relative Strength Index (RSI), a momentum oscillator, registered a local peak above the midpoint 50 level before retreating, suggesting waning upward momentum at that resistance point.
Looking forward, chart watchers are keeping a close eye on moving averages for potential warning signs. A “death cross” scenario, where the shorter-term 50-day moving average crosses below the longer-term 200-day moving average, could signal the potential start of a new, sustained move lower. Conversely, if bullish investors can successfully defend the low point established last month, it could lay the groundwork for a potential new uptrend developing during the second quarter.
Identifying crucial price levels is key for investors navigating Tesla’s current volatility. The first significant support area to monitor is around $225. This price zone could attract buying interest as it aligns with a trendline connecting trading activity near last month’s low and intersects with a range of price action dating back to a gap formed on the chart last July.
Should the price break below $225, the next major support level comes into view near the $186 mark. This area is significant as it corresponds to the upper boundary of a previous trading range established between early May and late June last year. Furthermore, it closely aligns with a prominent swing low recorded in August, potentially making it an attractive zone for longer-term investors.
On the upside, if Tesla shares manage to reclaim ground above the critical 200-day moving average, the next key resistance level sits near $360. This area represents a potential hurdle, having acted as resistance near the peak of a countertrend rally in February and coinciding with minor peaks formed last November.
Finally, sustained buying pressure could potentially propel Tesla shares towards the $421 region. This level might see increased selling activity as investors who bought at lower prices look to secure profits. It is situated near the peak reached in January and a trough from late December, both just below the stock’s all-time record high.
As Tesla prepares to release its delivery numbers, investors and analysts will be watching these technical levels closely for clues about the stock’s future direction in the coming weeks and months.
