Tesla Stock Jumps Over 10% as Buyers Reenter Market

Tesla Inc. TSLA Stock is experiencing a resurgence, climbing more than 10% on Monday morning. This rebound comes as buyers emerge following a recent downturn.

Previously, the Stock faced considerable selling pressure. The renewed optimism stems from factors such as the rollout of its Full Self-Driving (FSD) technology in China, relief from tariff uncertainties, and the presence of technical support levels.

Chart created using Benzinga Pro

TSLA Stock: Market Rally Amid Ongoing Challenges

Despite Monday’s significant gains, Tesla’s Stock remains down 28% year-to-date and 17% month-over-month. The bearish landscape is evident:

• Tesla Stock is currently trading below its five-day, 20-day, and 50-day exponential moving averages.
• The eight-day simple moving average (SMA) stands at $243.48, and the 20-day SMA at $258.95, suggesting a flicker of bullish momentum with the current price at $273.00.
• However, the 50-day SMA ($332.89) and the 200-day SMA ($284.66) indicate an ongoing bearish trend.
• The Moving Average Convergence Divergence (MACD) shows a negative reading of 24.83, amplifying bearish sentiment.
• The Relative Strength Index (RSI) has risen to 48.01, indicating that the stock has temporarily avoided oversold conditions.

Read also: US Business Activity Rebounds As Services Growth Outpaces Forecasts, Yet Cost Pressures Intensify

FSD Launch and Tariff Easing: Key Drivers for Tesla

The rollout of Tesla’s Full Self-Driving technology in China presents a potential catalyst for future growth. Although sales are anticipated, there is uncertainty over whether Chinese consumers will opt to pay a premium for FSD, especially since local competitor BYD Co Ltd BYDDF offers similar driver-assist tech at no cost. A successful adoption of FSD could enhance Tesla’s market position significantly in this important region.

Investor sentiment is further bolstered by reports that former President Donald Trump is reconsidering some broad tariff threats he made weeks ago. This potential reduction in trade tensions is seen as beneficial for Tesla, given its substantial involvement in China’s electric vehicle market.

Outlook for TSLA Moving Forward

The sustainability of Tesla’s rally will be contingent upon the continuation of buying momentum and whether fundamental developments such as the FSD release and easing tariffs can mitigate bearish technical indicators. Investors are keenly awaiting the upcoming first-quarter delivery report, scheduled for April 2, as it will mark a crucial moment for the company.

With strong initial trading momentum and an influx of buyers, Tesla’s recovery appears to be gaining strength. The critical question ahead will be whether this upward shift can break through significant resistance levels and establish a lasting turnaround.

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Image created using artificial intelligence via Midjourney.