Tesla stock gains 0.5% as Musk pledges 5-year CEO term
Musk encouraged shareholders not to worry about the stock's recent volatility
As of May 21, Tesla stock is trading at $343.82, up 0.5% in the last 24 hours. This price continues a strong bullish trend that began following the company’s Q1 earnings release.
Highlights
• Tesla stock rose above $343 on May 21, extending a 44% rally driven by optimism over AI and autonomy initiatives.
• Technical indicators signal overbought conditions, suggesting a possible short-term pullback toward $289 support.
• Elon Musk’s renewed leadership commitment and robotaxi plans have reinforced bullish sentiment despite weak China sales.
Tesla (NASDAQ: TSLA) rallying approximately 44% since mid-April. The sharp rally has propelled the stock well above its key moving averages. Currently, the 50-day Simple Moving Average (SMA) stands at $322.68, while the 200-day SMA rests at $275.24, confirming a positive medium- to long-term trend. Despite this bullish structure, several technical indicators point to a possible short-term cooling.
The Relative Strength Index (RSI) is at 69.36, just below the 70 threshold that traditionally signals overbought conditions. More notably, the Stochastic RSI is maxed out at 100, and the Williams %R indicator stands at -10.46 — both deep in overbought territory. Additionally, the Moving Average Convergence Divergence (MACD) remains in bullish alignment, with the MACD line well above the signal line and currently reading 7.82. These signs suggest that while upward momentum is still intact, the pace of gains may not be sustainable without a consolidation phase.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView.
On the price chart, immediate support lies at $289, followed by a more significant level at $271, where the 50-day SMA also acts as a dynamic support zone. These levels are critical for bulls to defend if the price retreats. On the upside, resistance can be expected around $430, which aligns with the mid-January countertrend peak, and further at $489, a level that approximates Tesla’s all-time highs from late 2021. A breakout above $430 would mark a significant technical shift, potentially ushering in a new leg higher.
Investor confidence lifted by AI and autonomy plans
While Tesla's fundamentals have shown mixed signals, recent market sentiment has leaned bullish due to CEO Elon Musk’s public remarks and strategic guidance. During a recent investor call, Musk encouraged shareholders not to worry about the stock's recent volatility, claiming that Tesla’s position is strong and that the current valuation reflects the long-term outlook. He also assured investors of his commitment to stay on as CEO for at least another five years.
One of the biggest drivers of the current rally is renewed enthusiasm for Tesla’s developments in artificial intelligence and autonomous driving. Musk announced plans to unveil a robotaxi service in Austin, Texas, in August, which is part of Tesla’s broader push into fully autonomous mobility. These announcements have reinvigorated investor interest, particularly in Tesla’s non-automotive revenue streams.
Despite this optimism, challenges remain. Tesla's Q2 vehicle deliveries in China dropped by 24% year-over-year, raising concerns about demand saturation and rising competition in the world’s largest EV market. Nevertheless, Wall Street analysts such as Morgan Stanley’s Adam Jonas maintain a positive long-term outlook. Jonas recently reiterated his $410 price target on Tesla, emphasizing the value of its AI and robotics units, which he estimates could be worth up to $1.4 trillion in the future.
Modest correction likely before another leg higher
The current technical structure suggests that Tesla’s stock could experience a minor pullback in the short term, as overbought conditions and profit-taking come into play. If the price dips toward $289 or even $271, it may find strong buyer interest, especially if broader market sentiment remains supportive. Holding above these support levels would allow bulls to regroup and potentially mount another rally toward the $430 resistance level.
If momentum continues and the $430 mark is convincingly breached, a retest of $489 becomes plausible in the coming weeks. However, failure to hold above $289 could see Tesla retrace further, possibly down to the 200-day SMA near $275. Overall, the intermediate trend remains bullish, but traders should be alert for signs of short-term exhaustion before new highs are tested.
Favorable macro conditions, including cooling U.S. inflation and expected interest rate cuts, are supporting tech stocks like Tesla. The EV sector stands to gain from regulatory tailwinds, though regional demand and competition remain uneven.
