As the chart shows, Tesla (TSLA) shares opened yesterday’s trading session with a bearish gap and closed more than 5% lower than the previous day’s close. Meanwhile, the S&P 500 index (US SPX 500 mini on FXOpen) also declined, but by only around 1%.

Why Tesla (TSLA) Shares Fell

The recent two-day decline may be part of a broader downtrend. As we noted earlier in March, one of the key bearish factors could be Elon Musk’s political involvement in the Trump administration. For investors, this may imply that:

→ A significant number of potential Tesla customers may be put off by Musk’s political stance, slowing sales.
→ The CEO may not be paying enough attention to the company at a time of intense competition. Notably, Chinese EV manufacturer BYD Co. (CN:002594) has announced the launch of its Super e-Platform, which can charge a vehicle with a 400-kilometre range in just five minutes.

This sentiment is reflected in analysts’ decisions, as they continue to lower their target prices for TSLA shares, further fuelling negative sentiment.

TSLA Price Forecast

According to MarketWatch, RBC Capital Markets has cut Tesla’s target price from $440 to $320 due to a worsening outlook for the company’s robotaxi programme and autonomous driving software.

However, RBC analyst Tom Narayan maintained a “Buy” rating on Tesla (TSLA) shares, stating that concerns over a sharp sales drop in Europe and China are “overblown.”

Technical Analysis of Tesla (TSLA) Chart

The previously identified downward channel (marked in red) remains relevant. However, price action suggests that selling pressure may be easing:

→ The decline on 10 March (marked by arrow One) was much more aggressive, but the downward momentum has since slowed (also marked by arrow One).
→ During yesterday’s session, the price closed only slightly below the opening level, suggesting that bears are hesitating near the yearly low.

This could potentially lead to a bullish Double Bottom pattern, increasing the likelihood of an attempt to break above the current resistance around the psychological level of $250.

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