Tesla’s (NASDAQ: TSLA) share price is at risk of dropping to around $200 after Finbold identified that the equity formed its first death cross in over a year, coinciding with a period of underlying bearish fundamentals.
Tesla closed Monday at $252, just below its 50-day and 200-day moving averages, confirming the crossover.
Historically, the death cross is viewed as a lagging indicator that often signals a longer-term downtrend. While not consistently predictive of extended losses, the last time this pattern emerged, in February 2024, Tesla shares tumbled by over 25% in the following weeks.
This technical pattern occurs when the 50-day moving average crosses below the 200-day moving average.
Adding to the concern is Tesla stock’s continued struggle to reclaim its 200-day moving average, which now acts as stiff resistance around $255. Bulls briefly attempted a breakout in March, but the move was rejected as trade tariff uncertainties impacted the company.
With Tesla sellers in control, the $200 to $210 zone may be the next key demand area. A breakdown below March’s low near $222 could accelerate the decline, especially if broader market weakness persists.
Tesla’s waning fundamentals
At the same time, Tesla’s fundamentals aren’t compelling, projecting more headwinds for the Texas-based company.
Notably, for the better part of 2025, the EV maker has been hit with softening demand for its vehicles as customers turn to rivals like Lucid (NASDAQ: LCID), partly as a backlash against CEO Elon Musk’s perceived polarizing political stance.
Meanwhile, growing competition from Chinese manufacturers and concerns over margins amid ongoing price cuts remain additional challenges for the company.
To this end, investors are looking forward to the next earnings report to see if Tesla can counter the bearish technical setup with stronger-than-expected results.
However, with Q1 earnings just days away, investor expectations remain muted. Tesla’s first-quarter deliveries fell 13% year-over-year, missing Wall Street estimates by 40,000 units.
Wall Street has also taken note with RBC’s Tom Narayan observing that Q1 may have benefitted from a March sales rush ahead of tariff fears. He pointed to potential upside from Tesla’s upcoming affordable model and the June launch of its Austin Robotaxi service.
Nevertheless, on April 11, Narayan expressed a bullish stand on TSLA, maintaining a ‘Buy’ rating with a $314 price target.
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