Consolidation above 290 level will accelerate Tesla's recovery

Tesla shares took a breather on Monday, halting an impressive rally. After surging over 25% from last week’s lows, the price ran into resistance at the 290 level, prompting traders to take a pause. If the bulls manage to push and consolidate above this level, they will open the way to the 310 and 330 levels. Technical indicators aren’t showing signs of a reversal yet, and with no major negative news in play, the uptrend could easily resume.

Tesla needed strong catalysts to recover from its disappointing first-quarter 2025 earnings report, and the company’s management stepped up. Last week, Elon Musk pledged to redirect his focus to Tesla's auto business after his US government commitments had diverted his attention in recent months. Yesterday, Dan Priestley, who leads the Semi program at Tesla, announced that production of electric trucks would begin at the Nevada factory by the end of this year.

Tesla's electric semi trucks have been six years in the making, with repeated delays hampering its launch. The situation was further complicated by import tariffs imposed by Donald Trump on critical components. However, US Commerce Secretary Howard Lutnick announced Monday the Trump administration would ease these duties for domestic automakers, who've been struggling with elevated tariffs on imported steel and aluminum.

Tesla shares may get another lift from the Department of Transportation's plan to relax certain requirements for self-driving cars. The proposed rules would exempt automakers from reporting minor self-driving incidents when damages fall below a specified threshold. US Transportation Secretary Sean Duffy argues these reforms are critical for American automakers to compete effectively against Chinese rivals.

The RSI on TSLA daily chart is gradually moving upward, but hasn’t yet reached overbought territory. That leaves room for this rally to push toward the 310, or even the 330 levels.

Consider the following trading strategy:

Buy TSLA near the 290 level. Take profit 1 – 310. Take profit 2 – 330. Stop loss – 250.