Tesla stock falls below $383 as Musk-related political risks grow
Tesla is under renewed pressure after the U.S. midterm elections as political risks around Elon Musk weigh on sentiment. The next test is whether the stock can reclaim $383 before downside risk extends toward the 50-day SMA.
391.79
414.23
Democrats won control of both chambers of the U.S. Congress in the November 3 elections. Tesla and SpaceX came under pressure as investors weighed the prospect of tighter regulation and increased political scrutiny.
The main concern stems from Musk’s close ties to the Donald Trump administration and his active support for Republicans. Even before the election, The Washington Post reported that Democrats were preparing for possible investigations into Musk’s activities, including his work at DOGE and SpaceX’s government contracts. Such probes could examine potential conflicts of interest and the use of government resources.
Holding below $383 keeps Tesla's bearish scenario intact
Tesla stock followed the scenario outlined previously. The price reached the $411 target, tested $414.23 and then moved into a correction.
Following the U.S. congressional elections, Tesla is down more than 4% in premarket trading on November 4, breaking below the important $383 support level.
If the stock fails to recover above $383, the risk of a further decline toward the 50-day SMA near $371.50 would rise sharply. This remains the base case for the next several days.
A move back above the 200-day SMA near $385 would invalidate this scenario. In that case, the stock could test resistance around $390.
Political uncertainty could keep Tesla volatility elevated
Unlike many other technology companies, Tesla faces an additional source of risk through the political activity of its CEO. Potential investigations involving Musk or his companies could add pressure to the stock even without any meaningful deterioration in Tesla’s operating performance.
At the same time, Democratic control of Congress does not automatically mean an immediate tightening of regulation. Much will depend on the specific initiatives pursued by the new Congress and how the Trump administration responds.
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