Tesla buyers weakening increase risks of selling stocks down to 280.50

Tesla (TSLA) shares have been on a downtrend since the beginning of the week, dropping by 3% on Monday. The main reasons for the decline were deteriorating brand perception and investors' concerns about Elon Musk's political activity. His advocacy for the right-wing populist AfD party in Germany caused a negative reaction from consumers, affecting sales. According to the Federal Office of Transportation in Germany, only 1,277 new Tesla cars were registered in January 2025. This is 59% less than a year earlier.

From a technical perspective, after leaving the uptrend on December 30, 2024, the stock price formed a downtrend. Breaking through the support level of the ascending channel was a signal to form a new wave on the H4 timeframe. The price is currently forming the third descending wave. The movement has become impulsive after breaking through the top of the first wave at 373.57 on February 6. If the decline continues, the nearest target will be the 161.8% Fibonacci level at $316.00. In case of further decline the $280.50 level which corresponds to the 200.0% Fibonacci extension may be tested.

The H4 chart demonstrates a series of bearish candles, indicating strong selling pressure. Absence of a strong bullish engulfing pattern confirms the buyers' weakness.

Moving Average of Oscillator (with parameters 12, 26, 9) is in the negative zone, confirming the bearish trend. The values of the oscillator are gradually decreasing, which indicates the increasing pressure of the sellers. Currently, there is no bullish divergence, which could signal a possible reversal.

Short-term prospects for TSLA stock suggest selling with the target of 280.50. Part of the profit should be taken near the level of 316.00. A Stop loss could be set at 409.70.

Since the bearish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.