Tesla shares selloff as short-term hopes battle structural risks

Tesla shares are now catching a bid and trying to recover from their recent sell-off, thanks to a good day on Wall Street. The main catalyst for markets was a deal in the US Senate to avoid a government shutdown, sparking a short-term rally in riskier assets. This helped the company and the broader tech sector push higher on Monday.

Nevertheless, such an upbeat sentiment is probably short-lived, failing to address the structural challenges Tesla is grappling with. The fundamentals are still shaky. Cybertruck sales nosedived 63% last quarter, and profits are dwindling. To make matters worse, the corporation has just lost its executives leading the Cybertruck and Model Y programs, thus creating more uncertainty.

Meanwhile, headwinds are mounting in critical markets like China. The tech giant hasn't secured full approval for its Full Self-Driving system there yet, which is a major hurdle. Despite plans to launch an updated FSD version by early 2026, Tesla is losing its edge to local competitors who offer similar features for free. With Chinese EV tax incentives set to expire in January 2026, analysts expect Tesla's sales to drop for the second year in a row in 2025.

On the daily chart, traders may see a technical bounce from the November 7 low. The Chaikin Oscillator is currently ticking up, showing some new buying interest. However, the momentum isn't strong—the Stochastic Indicator is stuck in the neutral zone at 44, which means there's no clear direction yet.

Consider the trading plan down below:

Sell Tesla shares when they approach $477 due to the US government reopening, causing investor euphoria. Take profit: $411.00. Stop loss: $485.00.

This forecast is relevant from November 11 till November 18, 2025.