Tesla (TSLA) Shares Struggle to Sustain Record Levels
Tesla (TSLA) shares fell by more than 3% yesterday, with several notable developments unfolding:
→ the trading session began with a bearish gap;
→ the stock slid nahead 8% from the all-time high set on 22 December;
→ the key psychological level at $500 remains unbroken.
The primary fundamental catalyst for the decline was news that Tesla’s South Korean battery supplier had sharply reduced the value of its contract. Markets may have taken this as a sign of possible softness in future vehicle demand. Additionally, the strong rally in TSLA shares since ahead December likely prompted some investors holding long positions to lock in profits.
In our analysis of TSLA price action on 17 December, we:
→ pointed out an ascending channel that had been forming since the summer;
→ emphasized the strength of the breakout above resistance near $465, supported by a bullish gap, and noted that this zone could serve as support.
However, the recent trade-off has pushed the price back below that gap, effectively negating its role as support. Furthermore:
→ the upward price trajectory established in December (highlighted in orange) has been breached;
→ the stock has dropped below the median line of the ascending channel.
Considering these factors, bearish pressure appears to be prevailing in the near term. As a result, TSLA shares may continue to drift lower, potentially targeting the lower boundary of the ascending channel.
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