High operational risks justify Tesla share selloff

Tesla shares have charted a modest recovery, stabilizing after touching a local bottom at $387.01. Following its January 28 quarterly report, the stock shed roughly 5% before finding a foothold at the $390 support—a floor last tested in November. Driving the rebound was Elon Musk's latest strategic pivot: a pledge to launch mass production of the electric semi-truck this year, alongside accelerated hiring to advance his vision of deploying 100 GW of US solar manufacturing capacity by late 2028.

In fact, the company's narrative is now splitting in two. Bullish investors point to its deliberate refocusing on future-facing verticals, such as robotics, energy, and long-promised self-driving taxi networks. 

Yet, beneath the surface, operational cracks are widening. Tesla surrendered its EV crown in Europe to Volkswagen and was dethroned globally by BYD. As electric vehicle demand slows worldwide, its expansion ambitions have hit another barrier: exclusion from a new US-India trade deal locks in heavy import tariffs, thus shutting the door to a vital growth market. Mounting capital expenditures are likely to tip free cash flow into the red by 2026, amplifying financial risk in a high-interest-rate environment. 

Market optimism remains tempered by Elon Musk's track record. His tendency to make ambitious promises that he does not deliver on—from the unrealized full self-driving promise of 2016 to last year's missed robotaxi rollout deadline—has made investors skeptical of new announcements, capping upside momentum for stocks.

From a technical standpoint, the daily chart reveals a market at an inflection point. After the steep decline to $387.01, signs of a bullish reversal are emerging, bolstered by a rising Chaikin Oscillator that signals accumulating buying pressure. However, with the current price ($416.63) trading firmly beneath the 20-period exponential moving average (EMA20) at $425.91, the near-term trend retains its bearish bias, suggesting any recovery may face stiff resistance.

Consider the plan down below for your trading:

Sell Tesla shares from $426.00. Lock in profits at $400.00. Place Stop loss at $435.00.

This forecast holds true from February 10 till February 17, 2026.