Tesla stock surges to $334 as U.S.-China tariff relief offsets 58% China sales slump
The Chinese market is a critical component of Tesla’s global strategy
As of May 14, Tesla stock is trading at $334, up 4.9% in the last 24 hours. The electric vehicle giant has experienced a remarkable surge, extending a five-day rally that has lifted the stock by over 40% from its April low of $214.25.
Technical analysis suggests that Tesla is currently experiencing strong bullish momentum. The breakout above the 200-day moving average, combined with the confirmation of a triple-bottom pattern, has emboldened buyers. This pattern, a reliable bullish signal, indicates a reversal of the previous downtrend. As a result, key resistance levels are now identified at $360 and $430, while support levels are positioned at $289 and $225. These zones will be critical for traders and investors looking to assess the stock’s next direction.
The relative strength index (RSI), a widely used momentum indicator, remains below the overbought threshold of 70. This indicates that despite the recent surge, Tesla’s stock may still have room for further gains without immediately becoming overvalued. However, investors should remain cautious as the RSI approaches higher levels, which may signal a potential pullback.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView
Another important technical indicator, the moving average convergence divergence (MACD), has also turned positive, further reinforcing the bullish outlook. The MACD histogram has shown increasing momentum in favor of buyers, a sign that the buying pressure may continue in the near term. Nevertheless, the strong rally also raises the possibility of profit-taking by short-term traders, which could lead to temporary volatility.
Market context: trade deal optimism offsets China sales decline
Tesla’s recent rally has not been purely technical. The market has also reacted positively to news of a temporary easing of U.S.-China tariffs. The United States has reduced tariffs on Chinese imports from 145% to 30%, while China has cut tariffs on American imports from 125% to 10%. This development has improved investor sentiment, particularly for Tesla, which maintains a significant presence in the Chinese market.
However, this optimism is tempered by weak sales data from China. According to recent reports, Tesla's vehicle sales in China fell by 58% week-over-week and 69% year-over-year during the week of May 5–11. This sharp decline has raised concerns about Tesla’s ability to maintain its growth trajectory in one of its most important markets. Analysts now anticipate that global Tesla deliveries could decline by 2.6% in 2025, with second-quarter estimates potentially lowered to 375,000 units.
The Chinese market is a critical component of Tesla’s global strategy, and any prolonged weakness in this region could significantly impact the company’s financial performance. Moreover, the ongoing price war in China’s electric vehicle sector, where Tesla has been forced to reduce prices to remain competitive, may further pressure its profit margins.
Consolidation likely before next move
Given the recent strong rally, Tesla's stock is likely to enter a consolidation phase in the short term. The most probable trading range in the coming days would be between $315 and $360. A decisive break above the $360 resistance could open the door for further gains towards the next target of $430. On the other hand, a pullback below $289 may trigger a decline towards the key support at $225.
Investors should closely monitor the $360 resistance, which could become a critical inflection point. If the stock fails to break this level, it could signal that the current rally has exhausted its momentum, leading to a period of sideways trading or even a correction. Conversely, a strong breakout above $360 with rising volume would be a strong signal of continued bullish strength.
Tesla’s recent gains are fueled by easing U.S.-China trade tensions, with both countries agreeing to reduce tariffs for 90 days. This has boosted investor sentiment, benefiting Tesla’s Shanghai Gigafactory operations.
