Key takeout
Tesla (TSLA) collapsed on Monday following a weekend announcement that CEO Elon Musk is planning to launch a new political party, governing concerns that his political involvement will run the EV maker and pay attention as he escalates a public feud with President Donald Trump.
Musk’s announcement comes just weeks after the billionaire left his role in leading the Trump administration’s cost-cutting government’s efficiency department, saying he will refocus his company. Musk’s involvement in Doge was seen as a distraction by investors and also appeared to hurt the Tesla brand in the minds of some consumers.
Tesla’s stocks won 23% in the second quarter, but 18% below last month’s high amid escalating tensions between Musk and Trump over the president’s hefty tax and spending bill. After Musk announced the formation of the “American Party” on Saturday, Trump posted on his true social platform that Musk “goes off the rails.”
Below we take a closer look at Tesla’s charts and use technical analysis to point out important levels worth noting in the possibility of further price fluctuations in stock.
Sales accelerate following retest of flag patterns
Tesla stocks broke from the flag earlier this month and then shifted gears late last week to retest the low-pattern trendline. However, sales accelerated during Monday’s trading session, with stocks falling to their lowest levels since early June. Tesla stock fell nearly 7% to around $294, recording the biggest drop in the S&P 500 on Monday.
Additionally, the relative strength index registered its lowest read since early June, confirming it would weaken the price momentum of EV makers’ stocks.
Identify three key support levels on Tesla’s charts and find overhead areas worth monitoring during potential rises.
Important support levels to monitor
The first low level of the watch is around $285. The area could offer support near the start of the flag pattern, several countertrend peaks formed on the charts earlier this year, and an election-driven breakaway gap from last November.
Slightly below this level, it’s worth tracking the $265 region. The stock could attract purchases at this location near two peaks developed on the charts last October.
A more significant decline will allow stocks to reconsider low support at the $225 level. Investors can ask for entry points for this area near the valley that appeared on the charts throughout most of March and April.
Overhead areas worth monitoring
During the upswing, the stock could first encounter sales pressure of around $318. Tactical traders can place sell orders at this location near last week’s Flag Retest High, the 50-day moving average, and a short pullback of stocks following last November’s POP.
Finally, the critical closure above this territory could lead to Tesla placing its test overhead resistance on the stock for $365. Investors may try to lock in the region’s profits near the two closely aligned peaks that formed on the charts last November.
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As of the date this article was written, the author does not own the above securities.
