Tesla’s stock has experienced a notable surge this week as U.S.-China tensions ease, drawing attention from market analysts. According to a report, Tesla (TSLA) “is flashing overbought technicals,” with its Relative Strength Index (RSI) surpassing the 70 mark. This threshold often signals to momentum traders that a stock has risen too quickly. The last occurrence of Tesla’s RSI exceeding 70 was in December 2024, preceding a significant three-month decline in stock value.
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Additional technical indicators also hint at a potential correction. The stock recently breached the upper Bollinger band, which suggests that intense buying activity has propelled the stock price upwards. Such rallies typically lead to a moderate correction as investors secure profits. Tesla’s short interest remains between 2.7% and 2.9%, but any increase beyond 3% could amplify selling pressure. Matthew Unterman from S3 Partners noted that the alignment of these technical signals suggests Tesla may be nearing a tactical turning point.
Currently, Tesla shares are on a six-day winning streak, trading approximately 4% higher at over $348. This recent rally has significantly reduced the stock’s year-to-date loss from 45% to less than 15%, according to data from the IndexBox platform.
