Tesla stock gains 2.4% as China price cuts and Musk focus lift shares
Tesla managed to outperform its sector peers last week.
As of May 6, Tesla stock is trading at $280.26, up 2.4% in the past 24 hours. This marks a continuation of the recovery from its April lows, following a strong 18% surge last week.
The rally has brought the stock to a critical technical juncture—the 200-day moving average. This level, now serving as immediate resistance, has historically been a key pivot point for Tesla, often signaling a shift in intermediate trend direction. The $289 level has emerged as a short-term ceiling, aligning with the 200-day MA and the upper bound of a descending trendline that extends back to late 2023.
A sustained move above this threshold would confirm a bullish breakout and potentially signal the start of a new uptrend. However, Tesla must demonstrate strong volume support to validate any breakout scenario. Below current levels, key support can be found at $270 and more substantially at $225. This latter level coincides with a previously tested base during Tesla’s March selloff. If breached, further downside could open up toward $165, which marks the low end of the recent 12-month range.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView.
Momentum indicators are signaling a cautious outlook. The Relative Strength Index (RSI) has entered the upper 60s, nearing overbought territory, suggesting that the stock may be due for a short-term consolidation or pullback. Furthermore, Tesla’s 50-day moving average is still trending downward and remains below the 200-day MA. The potential for a bearish “death cross” persists, which historically has been a warning sign for continued downward pressure unless countered by strong bullish catalysts.
Market context: geopolitical risk and leadership stability
Tesla’s recent performance has taken place against a backdrop of macroeconomic and geopolitical uncertainty. Market-wide volatility has been elevated due to escalating trade tensions, most notably following former President Trump's call for a 100% tariff on foreign electric vehicles. While the measure is not yet implemented, investor sentiment around EV stocks, including Tesla, has been notably affected.
Adding to this, recent Federal Reserve signals regarding sustained high interest rates have placed additional pressure on high-growth equities. Yet, despite this environment, Tesla managed to outperform its sector peers last week—buoyed by better-than-expected earnings and renewed investor enthusiasm around its AI-driven Full Self-Driving (FSD) platform.
An additional tailwind has come from Elon Musk’s decision to reaffirm his full commitment to Tesla. Reports indicate that Musk will shift his attention away from external ventures and refocus leadership efforts on Tesla’s core growth strategies. This decision has been interpreted as a vote of confidence by long-term investors, who have at times expressed concern over the CEO’s divided attention.
$270–$289 consolidation before directional breakout
Over the coming sessions, Tesla is likely to trade within a range of $270 to $289, as it consolidates recent gains and digests macroeconomic developments. A break above the $289 level, if accompanied by strong trading volume and positive momentum, would likely open the path toward $300 and potentially $320 in the medium term.
On the other hand, failure to breach this resistance may result in a technical retracement back toward the $255–$270 support zone. If market-wide risk-off sentiment intensifies, a deeper correction toward the $225 level remains on the table.
Investor sentiment around Tesla has improved following CEO Elon Musk’s renewed commitment to the company and management’s reaffirmed focus on autonomous driving expansion by late 2025. Despite underwhelming Q1 earnings, markets are pricing in a rebound driven by future innovation and leadership stability.
