Tesla shares have room to grow further ahead of annual report

In line with our prior expectations, Tesla’s stock (TSLA) reached a new all-time high in December and then entered into a correction. Prices fell by 15% from the peak before finding support near $425—a level that saw significant trading activity during autumn. The 100-day moving average and the uptrend line extending from April’s lows provided additional backing. Shares have rebounded over the past three sessions, with the nearest target in the $470–$475 range. This zone coincides with an unclosed gap from December 26–29.

The Relative Strength Index (RSI), pushed into oversold territory for the first time in ten months, also underpins the recent upward movement. The MACD indicator dipped into the negative zone as well. Its reversal could make opening long positions more appealing. As for the short ones, it is better to close them before Tesla’s annual report is published on January 28. This release could trigger a wave of volatility, with no clear trend direction in view.

The tech firm’s results for 2025 are unlikely to bring good news for investors. However, much of the negative impact has already been factored into by the market during the recent correction. Operating data show a 15% drop in shipments for the fourth quarter and an 8.6% decline for the full year. Tesla has officially lost its leadership in the electric vehicle (EV) market, with China’s BYD now wearing the crown. On the flip side, this business segment of Elon Musk’s brainchild is gradually becoming less captivating to traders.

Instead, market focus has shifted to Tesla’s autonomous vehicle, known as the Cybercab, with mass production scheduled to begin in April. According to Musk’s statements last week, the Full Self-Driving (FSD) fleet has already accumulated over 7 billion miles. The firm needs to hit a 10-billion-mile benchmark to advance the technology. In addition, the expected IPO of Musk’s other company—SpaceX—is also drawing traders’ attention. While the synergistic link between Tesla and SpaceX may not be obvious, a temporary surge in speculative interest is likely to occur.

Take a look at the trading plan below:

Buy TSLA above the uptrend line. Set Take profit at $475 and Stop loss at $425.