Takeaways
- Tesla shares tumbled again Tuesday, putting the EV maker's stock on pace to lose ground for the ninth consecutive week.
- The stock made a minor bounce off the lower trendline from a descending, broadening formation. However, it has not gained any traction on the upside since.
- Investors should watch major support levels on Tesla's chart around $190 and $140, while also eyeing key resistance levels near $265 and $360.
Tesla (TSLA), shares fell again sharply Tuesday, putting it on track to lose ground for a ninth consecutive week.
Shares have faced increased selling pressure in recent months amid mounting investor concern that CEO Elon’s extensive involvement with the Trump administration may damage the Tesla sales and brand. The stock may have been affected by a new set of headlines today, as Chinese EV manufacturer BYD unveiled an ultra-fast charging station and some Wall Street analysts offered up sceptical views on Tesla stock.
Tesla shares have lost all their gains after the election in November, when Musk’s close relationships with President Trump sparked a rally. The stock has dropped 53% from its all-time peak on Dec. 17,
Below, we examine the technicals of Tesla’s chart to identify major price levels investors may be monitoring during the stock’s current correction.
Descending Broadening Formation
Tesla shares have been trending lower since mid-December. The price has tagged the pattern’s upper and low trendlines several times.
Recently, the stock made a minor rally from the lower trendline in the formation but has since failed gain upward traction.
The relative strength indicator (RSI) recently broke through a downtrend that stretches all the way back to its high in December, possibly signaling a shift in price momentum.
Look at the chart of the EV maker to see what major support and resistance levels are worth monitoring.
Major Support Levels to Keep an Eye
Tesla shares fell 5.3% to close Tuesday's session at $225.31.
The first lower level is around $190. This area could see a lot of buying interest near a horizontal dividing line connecting a range peaks between April and June. It is also close to the early-August trough.
If you sell below this level, the shares will slide to a lower support level at $140. Bargain hunters may want to consider buying shares at this level, close to the stock’s 2024-low set last April.
Key Resistance Levels in Eye
Investors should first watch the $265 mark if the price moves higher. In this area, the price could face selling pressure near the peaks that appeared on the chart last July, September and Oct.
A decisive close over this level could push the price up to $360. Investors might look to unload Tesla shares around the twin peaks in November and last month’s anti-trend high. This area is also close to the 50% Fibonacci level when stretching a grid between the December high and March low.
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As of the date the article was written, author does not own any above securities.
