Tesla Stock Price Eyes Comeback as Key Catalysts Align

Key Insight

• Tesla stock price may rebound in the near term.
• Its European and Chinese sales have started rising this year.
• The stock has formed a falling wedge pattern on the three-day chart.

Like other American companies, Tesla’s stock price has dropped. It has moved into a technical bear market this year as headwinds have risen.

TSLA was trading at $380 on Monday, 23% below its all-time high. It has formed a highly bullish chart pattern, suggesting a rally this year as major tailwinds emerge.

Tesla Sales in Key Markets are Rising

Tesla’s sales in key markets are rising. This growth continues despite strong competition from rivals. Data released this week showed that its sales in Europe jumped in February after falling in the previous month. Its sales rose by 11.8% in February, marking the first increase in 13 months.

Sales rose even as competition in the bloc intensified. Most of it comes from both European and Chinese brands like BYD, Stellantis, and Volkswagen.

Recent data shows Tesla’s Chinese sales have rebounded in recent months. This recovery comes even as competition from local brands like Nio, Xiaomi, and XPeng has intensified. The company delivered 127,730 vehicles in January and February, up by 35% from the same time last year.

Most importantly, the US business is facing two major tailwinds that may lead to more sales in the coming years.

The first one is that the ongoing Iran war has pushed gasoline and diesel prices higher. This may push more customers to embrace electric vehicles, which are often cheaper to maintain.

Tesla will benefit from the strategic changes by major automakers. General Motors and Ford recently announced multi‑billion‑dollar write‑downs.

Most of these companies have announced a change in strategy. They are pivoting away from EVs and returning focus to Internal Combustion Engine (ICE) vehicles.

Tesla’s business will keep attracting more customers. It is working to launch affordable versions of its Model 3 and Model Y vehicles.

Pivot to Artificial Intelligence and Robotics to Boost Sales

The company has other tailwinds that may boost its performance in the coming months. The most important one is that its business will benefit from its pivot to the artificial intelligence industry.

One avenue of investment involves xAI, the firm behind X, once Twitter, and Grok. A $2 billion stake was taken in xAI, which has since combined with SpaceX.

It’s a company eyeing an initial public offering later this year. With AI valuations rising, Tesla’s investment will likely be much higher.

Elon Musk also recently unveiled plans to launch Terafab in Texas. Terafab, which will be the biggest chip factory in the United States, will be owned by Tesla and SpaceX.

The company will use the Terafab to manufacture its chips. That will power its other products, including its Optimus robots and its neural networks.

Most importantly, Tesla plans to accelerate the rollout of its robotaxi business. It’s expected to be a major business in the future.

Tesla Stock Price Forecast: Technical Analysis

The three-day chart shows that the TSLA stock price has slumped since December last year when it peaked at a record high of $500. It has now plunged to $380, near its lowest level since September 10 last year.

A closer look shows that the stock has bottomed at the Major S&R Pivot Point of the Murrey Math Lines. It has also found a floor at the 100-day Exponential Moving Average (EMA).

The stock has also formed a falling wedge pattern whose two lines are approaching their confluence.

Therefore, the Tesla stock will likely rebound in the near term. If this rebound happens, the stock will jump to the Strong Pivot Reverse level of the Murrey Math Lines tool at $437. A move above that level will point to further gains towards the all-time high of $500.

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