Tesla stock surges 6.9% as Musk pledges full-time focus on EV maker
Tesla's rally was catalyzed by Musk's public statements indicating he will recommit his focus to the company
As of May 28, Tesla stock is trading at $362.89, up 6.9% in the past 24 hours. This sharp move marks the highest closing price since early February, driven by renewed investor confidence following a series of updates from CEO Elon Musk.
Highlights
- Tesla stock surged 6.9% on May 28, breaking above key resistance at $354.99 and signaling strong bullish momentum.
- Elon Musk’s renewed commitment to Tesla operations boosted investor confidence amid concerns over his prior distractions.
- However, declining sales in Europe and China, along with an overbought RSI, suggest caution is warranted in the short term.
From a charting perspective, Tesla has completed a bullish pennant formation—often a continuation pattern that signals further upside once resistance is breached. The price action aligns with rising moving averages, particularly the 21-day and 50-day exponential moving averages, which are sloping upwards and now serving as dynamic support. The 200-day moving average, currently near $261, remains far below, reflecting the strength of the recent rally.
However, caution is warranted. The Relative Strength Index (RSI) is now approaching 70, a level typically associated with overbought conditions. This suggests a possible consolidation or short-term retracement may occur before the next leg higher. Current resistance levels to watch include $382, $430, and ultimately the 52-week high of $488.54. On the downside, key support is located at $325 and $289, levels that previously acted as resistance in early 2024.
TSLA stock price dynamics (March 2025 - May 2025). Source: TradingView.
Volume trends also add perspective. The most recent trading day saw 120.1 million shares change hands, slightly below the 50-day average of 125.9 million. This indicates solid but not euphoric buying interest, supporting the case for a sustainable rally rather than a speculative spike.
Musk reassures but macro and regional challenges remain
Tesla's rally was catalyzed by Elon Musk's public statements indicating he will recommit his focus to Tesla, promising to spend "24/7 at work" and even sleep at the Gigafactory in Texas. These remarks came amid rising investor concerns that Musk had become distracted by his ventures at X and political controversies. His recommitment has temporarily alleviated these concerns, injecting new confidence into Tesla's long-term vision, especially with the anticipated robotaxi launch set for August in Austin.
Yet, the underlying business fundamentals show signs of stress. In Europe, Tesla sales plummeted 49 percent year-over-year in April, marking the fourth consecutive monthly decline. Its market share has fallen to 0.7 percent from 1.3 percent a year ago. In China—its second-largest market—sales in the first two months of the second quarter are estimated to be down 23 percent year-over-year. These trends are particularly concerning given that EV adoption in both Europe and China is accelerating, and Tesla is losing ground to domestic competitors like BYD and Xiaomi.
The broader market environment is providing some support. On May 27, the Nasdaq Composite rose 2.5 percent, driven by improved sentiment following President Trump’s decision to postpone 50 percent tariffs on EU imports until at least July 9. This macro-level reprieve helped lift sentiment across the technology and automotive sectors, benefiting Tesla alongside peers like Nvidia and Rivian.
Upside continuation possible but vulnerable to setbacks
Looking ahead, Tesla appears poised to continue its rally in the short term, with the next major resistance level around $430. If bullish momentum sustains, a challenge of the $488.54 high could be within reach over the coming weeks. However, this scenario depends heavily on the broader equity market remaining supportive and Musk delivering tangible progress on Tesla's next growth levers—particularly autonomous driving and energy storage.
A pullback remains likely in the interim, given the overbought RSI and the lack of improvement in international sales metrics. Traders should watch for possible retracements to $325 or even $289, which could present new entry opportunities if market sentiment remains intact.
Tesla’s international outlook is under pressure, with German sales plunging 76% year-over-year in February 2025 amid possible consumer backlash tied to Elon Musk’s political stance. Additional threats include potential new U.S. tariffs on European car imports and changes to EV tax incentives, which could impact margins and global sales.
