After suffering a protracted downturn that started in May and an 18.40% collapse to $309.22 since July 21, Tesla (NASDAQ: TSLA) stock might finally be poised for recovery on the morning of Tuesday, July 28.
Specifically, the 14-day relative strength index (RSI) for TSLA shares has hit a value of 27 following the Monday regular session, meaning the equity is the most oversold it has been at any point since March 2025.
Notably, Tesla stock slowly regained upward momentum after hitting the previous low roughly 15 months ago, and the technical signal preceded a 90% rally from $250 to $480 between March and December last year.
Notably, the upsurge did not come immediately after the RSI flashed the buy signal, and TSLA suffered another downward phase before finally reversing in April 2025.
Why Tesla stock might fall further despite turning oversold
Elsewhere, the situation is arguably different for Tesla in 2026 than it has been at almost any point during the decade.
Indeed, Elon Musk’s electric vehicle (EV) company is suffering from both confusion and disappointment given the recent business developments.
On the one hand, the rollout of autonomous driving, the ‘Robotaxi’ service, and the humanoid ‘Optimus’ robots is slower than hoped – and promised – leading to investor disappointment.
The situation is also exacerbated by the EV maker’s history of overpromising and underdelivering, with, by press time on July 28, 2026, multiple articles documenting the history of Elon Musk’s predictions of imminent breakthroughs that have yet to come to pass being available online.
Under the circumstances and given that Tesla stock has, arguably, been priced based on the hopes for the future rather than contemporary performance, there is much room to doubt if the latest technical signal can translate into a decisive rally.
On the other hand, the increasingly disappointing SpaceX (NASDAQ: SPCX) initial public offering (IPO) is itself drawing much attention from TSLA shares all the while sparking merger speculation – the rocket company has already acquired the artificial intelligence (AI) company xAi which has itself absorbed the social media platform X – and arguably increasing shareholder worries that Elon Musk might be a distracted leader for the foreseeable future.
Wall Street weighs in on whether Tesla stock is a good buy
Notably, despite institutional analysts historically being mostly favorable toward the world’s richest man, their confidence in Tesla’s performance in 2027 also appears to be waning.
Indeed, Wall Street overall considers TSLA stock a ‘Hold,’ and forecasts a 22% rally to $383 on average, per the data Finbold retrieved from TipRanks on July 28.
Still, it is worth remembering that rating aggregators tend to take all notes issued within the last three months into account, making the predicted 12-month rise more of a reflection of Tesla stock’s latest crash than of persistent institutional confidence.
Ultimately, while the latest RSI reading is likely to generate a rally in the coming months, the uptrend is unlikely to last barring a breakthrough announcement from the EV maker, rendering TSLA shares a dubious stock pick.
Featured image via Shutterstock
