Tesla correction creates buying opportunity amid trade risks and supply data expectations

Earlier this week, Tesla shares fell 1.67%, closing at $258.62. This decline extends the stock’s downward trend since the start of the year, with Tesla losing nearly 37% of its value since January. Despite a 6% rebound last week, February and March were among the worst-performing months for the company.

One factor behind the recent drop stems from policies under President Donald Trump’s administration. Last week, Trump announced a 25% tariff on all imported cars and light trucks, along with plans to impose reciprocal tariffs on imports from all trading partners. While this move could reduce uncertainty around US trade policy, potential retaliatory measures risk escalating trade tensions. Such developments weigh on the broader auto sector, adding pressure to Tesla’s already struggling stock. 

However, analysts at Stifel point out that Tesla’s heavy US production base makes it less exposed to tariff impacts than competitors, who may need to raise prices to offset costs.

The key focus this week will be Tesla’s Q1 delivery report, due Wednesday. Wall Street expects around 410,000 deliveries, but RBC analysts project a lower range of 360,000 to 378,000. A figure above 360,000 could help stabilize the stock amid ongoing uncertainty.

As of 01.04.2025 the Stochastic oscillator signals a downtrend, with the %K line crossing below the %D line on March 27. The crossover occurred after both entered overbought territory, suggesting a likely short-term correction.

The MACD also reflects bearish momentum, though the decline may be slowing. The MACD line is showing early signs of turning upward, while the gap between it and the signal line continues to narrow.

Current recommendation:

Buy at the current price. Take profit – 291. Stop loss – 217.95.