After Five Consecutive Losing Days, Is It Time for Tesla?

On Monday, the S&P 500 and the Nasdaq Composite both closed at record highs.

The Nasdaq (left chart) has closed higher for six consecutive trading days. The tech-laden index has also just formed a golden cross (shaded yellow). This bullish indicator flashes when a rising 50-day moving average (blue) crosses above a rising 200-day moving average (red).

Meanwhile, the S&P 500 (right chart) has closed higher for three consecutive sessions, and is very likely to form its own golden cross sometime this week (shaded yellow). 

Large-cap tech has been leading the way. On Monday, Microsoft MSFT closed just four cents below its all-time high. Meta Platforms META, Oracle ORCL, Broadcom AVGO, Robinhood HOOD, and Netflix NFLX all closed at their highest prices ever.

Tesla Bucks the Trend

In the midst of this bullish price action, Tesla has been bucking the trend. The stock has now fallen for five consecutive days. Is it time to buy shares of the Austin, Texas-based EV maker?

The first half of 2025 hasn’t been kind to Tesla. The stock is down 16.25% year-to-date, and has fallen 10.77% over the past five trading days.

However, Tesla’s current pullback is occurring on light turnover (shaded yellow). Volume has steadily declined as the stock moved lower. This is an indication that the current selling pressure on the stock is relatively insignificant. 

On Monday, Tesla closed just $4 above its 200-day moving average (red) and $5 higher than its 50-day moving average (blue). Both of those key indicators could provide a floor for the stock.

Deliveries and Earnings On Tap 

What’s causing Tesla's wheels to spin? There are a number of issues and several upcoming events acting as a roadblock to Tesla’s advance.

Deliveries for the second quarter are expected to drop below 400,000. Two quarters ago, that figure was nearly 500,000. Q2 deliveries should be reported later this week. 

Also, the company is scheduled to report earnings in less than a month, on June 29.

There are also legitimate concerns that CEO Elon Musk’s political activism will cost Tesla sales. While this is undeniable, it’s also universally understood. Therefore, to some degree, this information is already reflected in Tesla’s current price.

Bottom Line

Last month, we were fortunate to initiate a new position in Tesla near $285. I’m adding to that position at current levels, thanks to the stock’s recent pullback and the overall momentum of the markets. 

I’m still keeping some powder dry, in case of a post-earnings selloff, but Tesla’s challenges are widely understood, and therefore are likely to be reflected in the stock’s current price. 

At the time of publication, Ponsi was long TSLA, AVGO, ORCL and HOOD.