Selling Tesla stock amid profit-taking in tech sector

Tesla shares are now attempting to recover, hovering around $408 after a recent descent. Investor concerns over the tech sector’s overvaluation have recently increased, weighing on the stock market and triggering a wave of profit-taking along with capital rotation.

Two key factors are adding pressure to Tesla’s fundamentals in the medium term. The first is neck-and-neck competition in the Chinese auto industry, where the company's sales in October dropped to a three-year low with its market share falling to 3.2%. The aggressive expansion of local manufacturers is undermining Tesla's core business growth. The second is ongoing trade tensions between the two leading global economies that are costing the firm a great deal of money, as it must restructure supply chains and force contractors to exclude Chinese components in American vehicle production.

However, Tesla’s market cap is primarily based on expected future technologies, such as full self-driving and robotaxis. Analysts from Stifel and other companies typically raise their average share price targets, but this is only due to these bright future prospects. At the same time, the fate of driverless technologies is unclear. These projects remain high-risk, face regulatory hurdles, and require years of investment, while their commercialization in the foreseeable future is highly unlikely.

From a technical perspective, a short-term rebound could take place. The market has already seen a similar upward reversal after a prolonged decline. The Stochastic Indicator, being in oversold territory, creates a ground for prices to bounce back. Meanwhile, the Chaikin Oscillator signals a reduction in capital inflows and selling pressure, suggesting that traders are ready to accumulate positions. This paves the way for a move to the higher range between $415 and $423. This scenario will be likely if the key support level at $400 holds.

Adhere to the following trading strategy:

Sell Tesla shares at the current price or near $423. Place Take profit at $390 and Stop loss at $425.

This forecast is valid from November 18 to November 25, 2025.