Tesla stock tests $289 as U.S.-UK trade deal lifts sentiment
Operationally, Tesla is facing challenges in China, one of its largest markets
As of May 9, Tesla stock is trading at $284.82, up 3.1% in the past 24 hours. This recent surge has brought the stock closer to a critical resistance level of $289.
The latter is a key technical barrier that aligns with recent swing highs and the 200-day moving average. A breakout above this level could signal renewed bullish momentum for Tesla, while a rejection may result in a pullback. Tesla's stock price has shown notable volatility, with an intraday high of $289.71 and a low of $278.13. The current price action suggests a testing of the $289 resistance, a significant level that has repeatedly acted as a barrier in recent weeks.
A successful breakout above this level could lead to a rapid rally towards the $300 mark, a psychological milestone and a region of potential selling pressure. The Relative Strength Index (RSI) is currently near the neutral 50 mark, indicating balanced buying and selling pressures. Meanwhile, the Moving Average Convergence Divergence (MACD) is on the verge of a bullish crossover, a signal that typically precedes upward price movement.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView.
However, volume analysis reveals a decrease in trading activity, which could imply a lack of strong conviction among traders at current price levels. Support for Tesla is established around the $265 level, which has previously acted as a consolidation zone. If the stock fails to maintain its current momentum, it may retrace to this support, providing a potential buying opportunity for investors seeking to enter at lower levels.
Tariffs and Musk’s political connections impact sentiment
Tesla’s recent price action has been influenced by external factors, including geopolitical tensions. The U.S.-U.K. trade deal announced by President Donald Trump includes reduced tariffs on vehicles and auto parts, providing automakers like Tesla with more favorable conditions for cross-border operations. This agreement has boosted market sentiment, directly benefiting Tesla's stock as it reduces costs and enhances profitability.
Furthermore, Tesla CEO Elon Musk’s involvement with the U.S. government and his association with President Donald Trump have also become a topic of debate among investors. Some market participants view Musk’s political connections as a potential risk, while others see them as a strategic advantage, particularly in areas such as space exploration and artificial intelligence.
Operationally, Tesla is facing challenges in China, one of its largest markets. The company reported a 6% year-over-year decline in sales for April, delivering 58,459 vehicles. This slowdown in China may weigh on Tesla’s overall growth, especially if similar trends continue in the coming months. Nevertheless, Tesla remains optimistic about its long-term prospects, with plans to launch a pilot ride-hailing service in Austin this June, leveraging its advancements in self-driving technology.
Consolidation likely between $265 and $289
In the short term, Tesla’s stock is expected to consolidate within the $265 to $289 range. A decisive move above $289, accompanied by increased trading volume, could pave the way for a rally toward $300. This breakout scenario would be supported by a bullish MACD crossover and a rise in RSI above 60.
Conversely, failure to breach the $289 resistance could result in a pullback to the $265 support level. If the stock breaks below this support, the next target for sellers may be around $250, a level that previously acted as a support zone.
Tesla's stock is being influenced by broader market dynamics, including U.S. Representative Marjorie Taylor Greene's recent investment in the company while chairing a cryptocurrency subcommittee. Her involvement has drawn media attention and sparked concerns about the impact of political connections on Tesla’s image.
