Tesla stock rises to $276 as political ties and tariff risks fuel debate
U.S. Representative Marjorie Taylor Greene has increased her holdings in TSLA
As of May 8, Tesla stock is trading at $276.22, up 0.3% in the past 24 hours. This modest gain reflects the ongoing tug-of-war between bulls and bears as the stock remains range-bound.
Despite recent buying interest from high-profile figures like U.S. Representative Marjorie Taylor Greene, Tesla’s price action suggests a cautious market outlook. Tesla (NASDAQ: TSLA) has been navigating a volatile trading range, with significant technical levels defining its price action. The stock has encountered strong resistance at $289, which aligns with the 200-day moving average and a previous swing high. This area has repeatedly acted as a ceiling for the stock, preventing further upside momentum.
On the downside, support is observed at $225, a level that has consistently acted as a safety net for buyers. This area is critical because it aligns with a consolidation zone from earlier in the year. A breach below $225 could open the door to accelerated losses, with the next major support appearing around $170. This lower level has previously served as a strong rebound point for Tesla, making it a crucial line of defense for bulls.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView.
Technical indicators offer a mixed picture. The Relative Strength Index (RSI) is hovering around the neutral 50 mark, indicating a lack of strong momentum in either direction. This neutrality reflects the market's uncertainty regarding Tesla’s near-term direction. The Moving Average Convergence Divergence (MACD) is also relatively flat, suggesting that neither bullish nor bearish forces are dominating. Volume has been modest, further emphasizing the lack of strong conviction among traders.
Political involvement and tariff concerns weigh on sentiment
Beyond technical factors, Tesla's stock is being influenced by broader market dynamics and recent developments involving high-profile figures. Notably, U.S. Representative Marjorie Taylor Greene has recently increased her holdings in Tesla while chairing a subcommittee focused on cryptocurrency, particularly Dogecoin. Her investment has drawn media attention, but it also raises concerns about the potential impact of political involvement on Tesla’s image and operations.
Adding to the uncertainty, the broader market is contending with potential economic headwinds. U.S. President Donald Trump has proposed new tariffs, including a 100% tariff on foreign films, as part of his policy agenda. While these tariffs are not directly related to Tesla's automotive or energy businesses, they contribute to a broader atmosphere of economic unpredictability. Market participants are cautious about the potential ripple effects of such measures, especially if they lead to retaliatory actions by other nations or impact consumer sentiment.
Another factor weighing on Tesla is the ongoing debate over interest rates. The Federal Reserve’s monetary policy remains a focal point for investors, with any signs of continued tightening likely to pressure growth stocks like Tesla. Rising interest rates increase the cost of borrowing and can reduce the attractiveness of high-growth companies that rely on future earnings projections.
Short-term consolidation with potential for breakout
In the short term, Tesla's stock is expected to remain in a consolidation phase, trading between the $225 support and the $289 resistance levels. Traders should monitor these boundaries closely, as a clear breakout in either direction could set the stage for a substantial move.
If Tesla manages to break above the $289 resistance, it could trigger a rally toward $360, a level that represents a previous high and a key psychological barrier. Such a breakout would likely require strong buying momentum, driven by positive news or strong earnings results. Conversely, a breakdown below $225 could signal a deeper correction, with the stock potentially declining toward $170, a historically significant support level.
Tesla's high valuation, with a current P/E ratio of 171.73 and a forward P/E of 119.05, indicates strong investor expectations for future growth. However, any signs of slowing growth or declining sales could lead to downward pressure on the stock.
