Market participants are waiting for slight rebound in Tesla stock for profitable sale

During Monday's trading session, Tesla shares hit a new yearly low, coming just slightly above the October level of 212. On the daily chart, the 220 support level has held firm, with buyers stepping in to defend it for the third time in the past month. While a bounce upward is possible, any rally toward the 290 level may present an opportunity to shift from long to short positions. Currently, there isn’t enough positive news to fuel a more substantial price recovery.

One of Tesla's most ardent supporters, Wedbush Securities analyst Daniel Ives, slashed his price target on the stock by over 40%, citing concerns about Donald Trump's trade policies and the brand damage made by Elon Musk's. Ives warns that current US tariff policies could severely disrupt Tesla's operations. The company's entire supply chain and global footprint, which have long provided a critical advantage over competitors like China's BYD, now face significant threats.

Against this backdrop, several media outlets reported on Musk's attempts to convince the US president to waive at least some import duties, that have rattled global financial markets. The biggest concern remains Tesla's business in China, where consumers are increasingly favoring electric vehicles from local manufacturers like BYD, Nio, and Xpeng. According to Reuters sources, Trump rejected Musk's request.

The Chinese government's firm stance of refusing to negotiate with the United States and mirroring all imposed tariffs spells trouble for Tesla shares. Wedbush Securities has slashed its price target for the stock from $550 to $315, though even this revised level may prove overly optimistic. JPMorgan's Ryan Brinkman argues that analysts continue to underestimate both the existing damage to Tesla's brand and the looming challenges ahead.

Traders may consider exiting positions in the 250–270 range, with bears eyeing another test of the $220 support.

Consider the following trading strategy:

Sell Tesla in the range of 250–270. Take profit – 220. Stop loss – 290.