Selling Tesla stock on profit-taking after setting new all-time high

A series of positive news has recently pushed Tesla shares to a new all-time high of $493.17, with the Delaware Supreme Court’s ruling restoring Elon Musk's 2018 pay package being the key event. Resolving years of legal uncertainty was well-received by the market.

The situation was also bolstered for the time-being by the California regulator's decision to postpone a sales suspension, which removed immediate operational risks. Tesla's resilience to withstand infrastructure failures, seen during the San Francisco blackout, has had a positive impact on the company's reputation. However, the overall fundamental picture is more complicated than it seems.

The tech giant’s heart—the automaking business—is now facing several challenges, including a significant slowdown in demand for electric vehicles (EV) in key regions, the exhaustion of government incentives, and increased competition. Thus, Tesla is now more focused on developing robotaxis and autonomous driving technology. But standing out in this industry is getting harder every day, with rivals breathing down its neck.

The technical setup, which points to an overheated market, aligns with fundamental factors. After reaching a peak near $498, the stock price approached the upper Bollinger Band, a typical sign of overbought conditions. At the same time, the Stochastic Oscillator, still being above 70, has reversed downward, suggesting waning upward momentum. This means that most purchasing volumes, driven by positive news, have already been priced in. 

Both fundamental and technical factors tell the same story: the market is extremely overheated. Despite all the positive data related to robotaxi development and the court decision on Musk's compensation, momentum indicators are screaming about a loss of the previous upside potential. This sets the stage for an upcoming correction.

Consider the following trading strategy:

Sell Tesla shares at the current price, or closer to $500.00, with Take profit at $465.00 and Stop loss at $508.00.

This forecast remains true from December 23 to December 31, 2025.