Selling Tesla shares with $320 target waiting for markets to lose optimism

Tesla's share closed at $348 on August 25. Recent market activity was primarily driven by commentary from Jerome Powell at the Jackson Hole Symposium, which spurred investor appetite for risky assets, particularly for tech stocks.

The corporation keeps plowing into autonomous driving technology and plans to launch its own robotaxis. Management anticipates these initiatives will be future catalysts for growth. To date, however, such efforts have not generated substantial financial returns. 

Concurrently, Tesla is facing significant headwinds. A recent legal ruling resulting in a $243 million verdict concerning a fatal Autopilot incident underscores the mounting legal liabilities associated with its self-driving ambitions. The company's choice to say no to a $60 million offer to wrap up the case caused even more financial strain and hurt its reputation. This outcome may set a legal precedent and foster further investor uncertainty regarding similar pending litigation. 

Operational challenges are also not to be taken lightly. Tesla's global sales in the first half of 2025 slid down by about 13% compared to the previous year. This highlights the intensified competitive pressures within the electric vehicle sector, particularly from Chinese manufacturers.

Right now, Tesla is pursuing an adaptation strategy in the Asian country, choosing to incorporate local artificial intelligence technologies from DeepSeek and Doubao instead of its proprietary Grok system. Such a shift indicates dual pressures: the need to comply with regulations and the competitive challenges posed by domestic automakers. The company's untoward conditions are evident in its performance, with deliveries from the Shanghai facility experiencing a decrease in six out of the first seven months of the year.

On the 4-hour chart, the price is nearing $348.00, which represents the upper boundary of a converging triangle. This upward movement is happening as the Stochastic Oscillator enters the overbought territory with readings of 83 and 65. This suggests that the current rally may be ending, and a corrective phase could be coming soon.

Market expectations of an imminent Federal Reserve rate cut have already been reflected in the asset's price. Nevertheless, this forecast may fail to materialize in the near future, thus creating downward pressure on valuations. If there are problems with the law or how the corporation is doing, the share price might go down a lot. Conversely, if prevailing investor optimism persists and is bolstered by positive updates on the robotaxi initiative, quotes may attempt to challenge the resistance level established in June.

Suggested strategy for trading:

Sell at the current price. Take profit: $320.00. Stop loss: $360.00.

The forecast is relevant from August 26 till September 2, 2025.