Technical Analysis of Tesla Stock: The Death Cross as a Sell Signal
The Tesla stock is currently facing a significant technical sell signal, known as the “Death Cross.” This signal occurs when the 50-day moving average falls below the 200-day moving average, which is interpreted as strongly bearish in technical analysis.
What is a Death Cross?
A Death Cross is a chart signal that is often seen as a warning of a longer downward movement. It occurs when the short-term strength of a stock price is overshadowed by long-term weakness. Historically, this signal has not been a perfect timing indicator, but it has frequently pointed to weaker market phases.
Current Situation of Tesla Stock
The Tesla stock has already suffered significant losses since the beginning of 2025, declining by about 37.5%. The closing price on April 11, 2025, was $252.31. Despite these price losses, the stock’s valuation remains high, with a forward price-to-earnings ratio (P/E) of over 85.
Fundamental Challenges
In addition to technical challenges, Tesla is also facing fundamental problems. Sales figures in the first quarter of 2025 decreased by about 13% compared to the previous year, falling short of analyst expectations. Tesla’s market share in the US electric vehicle market has dropped from 80% in 2020 to 49% in 2024. Additionally, CEO Elon Musk’s political engagement has led to societal resistance that negatively affects sales figures.
Market Comments and Forecasts
Analysts are divided on Tesla’s future prospects. While some see the high P/E as problematic, others offer optimistic forecasts that point to the company’s potential in areas such as AI and robotics. Price targets vary widely, ranging from $120 to $515, reflecting the uncertainty in the market.
Conclusion
The Tesla stock is at a critical point, as the Death Cross represents a strong sell signal. Combined with fundamental challenges, this could lead to further price losses. Investors should closely monitor the situation and adjust their risk management accordingly.