After months of hit on the markets, Elon Musk’s electric vehicle kingdom is sailing past the level of resistance as if it had Autopilot engaged, and investors are looking after the ride this time. The relief over tariffs is calming some jittery nerves and the stock is swaying as a revenge.
Tesla shares rose 4.9% and is trading at $334 on May 14, concluding a five-day run and a strong 40% recovery from April’s low of $214.25. The rally comes as positive technical indications meet macroeconomic relief, supporting the electric vehicle titan to resist bearish pressure despite a sharp plunge in China sales.
Technical Tailwinds
Tesla’s recent price action has traders applauding as the stock decisively broke above its 200-day moving average. A confirmed triple-bottom formation, a traditional bullish reversal signal, has encouraged buyers, and the worst of the downtrend can seemingly be left in the past. As a result the resistance level is recognized at $360 and $430, while the support levels are at $289 and $225.
The relative strength index (RSI) is still below the 70-overbought line, suggesting that there is more room for the rally to go before it gets into overheated conditions. The moving average convergence divergence (MACD) has also turned positive, and its histogram is indicating a steady gain in bullish momentum. However, the strength of the latest move increases the chances of profit-taking or consolidation in the short term.
Tariff Relief VS Chinese Sales Slide
Aside from the charts, Tesla’s run has been backed up by renewed optimism regarding U.S-China trade tensions. The two countries have reached a temporary agreement to cut tariffs, with Washington lowering from 145% to 30%, and Beijing from 125% to 10%, in what is termed as a short-term truce. This news brought a sense of relief for Tesla, which depends significantly on its Shanghai Gigafactory for worldwide manufacturing and income.
Tesla’s week-to-week sales in China fell 58% for the week ending on May 11, which is a whopping 69% decline year-over-year. The figures raise new concerns about Tesla’s competitiveness in China’s hyper-competitive EV market, where domestic competitors continue to squeeze margins with relentless pricing. Analysts now forecast a 2.6% drop in worldwide deliveries for 2025, with Q2 projections lowered to 375,000 units, further highlighting the headwinds Tesla is up against despite recent stock price gain.
Next Step to Focus
Having posted such a powerful rally, Tesla should consolidate between $315 and $360 in the short term. Traders are monitoring the $360 resistance level closely, a high volume breakout above this level will suggest further upside to $430. On the other hand, a breakdown below $289 may be inviting deeper correction risks, with targets to the $225 support zone.
If the rally is going to continue, Tesla has to show that it’s capable of innovating despite tough times and protect its domain within the globe’s most contested EV market. With macro news and technical indicators drawing in opposite directions, Tesla’s way forward depends on its capacity to maintain momentum amid global market issues, particularly in China.
