Selling Tesla shares amid fundamental headwinds

On Tuesday morning, Tesla stocks opened at $420.08, extending a sharp rally fueled by CEO Elon Musk's purchase of nearly 2.57 million shares, worth about $1 billion. The deal demonstrated his commitment to the American corporation, promptly boosting investor confidence. The market interpreted this acquisition as Musk's dedication to Tesla, despite his extensive political engagements that had sparked concerns about his reduced involvement in the company.

Upward momentum is further supported by raised delivery forecasts, with Barclays anticipating around 465,000 vehicles for the third quarter, well above the consensus of 430,000. This optimism is partly driven by accelerated US sales ahead of the expiration of federal electric vehicle tax credits at the end of September.

However, underlying challenges persist. Despite rising prices, Tesla's US market share fell in August to its lowest in nearly eight years, reflecting intensifying competition with other manufacturers who are actively using subsidies and marketing incentives. Although the overall growth was 14%, the company’s stocks increased by only 3.1%, thus highlighting weak demand due to the lack of new models in the lineup and ongoing price reductions.

From a technical standpoint, Tesla's shares indicate strong upward momentum after surpassing the key resistance at $400. The Chaikin Oscillator confirms that this rally was supported by significant buying volume. However, the pace of accumulation has recently begun to slow. Meanwhile, the RSI has moved into overbought territory, suggesting the potential for a pullback in the near term. Collectively, these signals point to a possible exhaustion of the current bullish momentum and a reversion to the stock's prior trading dynamics.

Take into account the following recommendation:

Sell at the current price, i.e., $410.78. Take profit: $360. Stop loss: $440. Short-term growth has reached its limit, and the company's shares are vulnerable to a correction due to fundamental competitiveness issues after tax breaks expire.

This forecast is relevant from September 16 till September 23, 2025.