San Francisco, CA – Tesla (TSLA) shares experienced a significant decline of more than 15% on Monday, leading the decliners in the S&P index and closing below their level on Election Day for the first time. This drop comes after the stock had initially surged following Donald Trump’s presidential election victory, as many anticipated that CEO Elon Musk’s close ties to the president would benefit the electric vehicle manufacturer. However, since reaching a record high in mid-December, Tesla shares have plummeted by 55% due to concerns among investors about potential fallout from Musk’s extensive involvement in the Trump administration and disappointing sales figures.
Investors are closely monitoring key support levels on Tesla’s chart, particularly around $215 and $165, while also keeping an eye on major resistance levels near $265 and $300. Despite the recent decline, Musk remains optimistic about the company’s future, stating in an interview with Fox Business that he expects to stay in the Trump administration for another year despite facing challenges in managing his businesses.
Technical analysis of Tesla’s weekly chart reveals that the stock has fallen below the 200-week moving average as it continues to trend downward. The relative strength index (RSI) indicates bearish momentum, with the indicator showing a reading below 50. However, the RSI has historically bounced back from this level, suggesting a possible turnaround in the stock in the near future.
Investors are advised to pay attention to key support levels at $215 and $165, which could serve as potential buying opportunities. On the other hand, major resistance levels at $265 and $300 will be crucial to watch as the stock attempts to recover from its recent losses. The volatile nature of Tesla’s stock has attracted the attention of institutional investors and hedge funds, as evidenced by increasing trading volumes during the recent decline.
In conclusion, while Tesla shares have experienced a significant setback in recent weeks, there is still potential for the stock to rebound as investors assess the impact of Musk’s role in the Trump administration and monitor sales figures in key markets. As always, it is important for investors to conduct their own research and analysis before making any investment decisions.