Electric vehicle manufacturer Tesla (NASDAQ: TSLA) is facing further downside risks heading into the new year, as technical indicators point to renewed selling pressure.
The bearish outlook by TradingShot in a TradingView post on November 6 follows the stock’s latest rejection at a key resistance level, with the analyst projecting another downward move before a potential recovery.
To this end, the analyst identified $260 as the next major downside target, suggesting Tesla could reach this level in early January 2027.
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As of press time, Tesla shares traded at $358, up 4.27% on the day. A decline to $260 would represent a potential loss of 27.45%.
TradingShot noted that Tesla has been trading within a one-year descending channel, characterized by successive lower highs and lower lows.
TSLA’s failure to break resistance
The latest rebound failed to break above the channel’s resistance, with Monday’s high forming another lower high. The rejection below the 50-week moving average (MA), represented by the blue trendline, further reinforced the bearish outlook.
The analyst considers this rejection the beginning of another downward leg, following similar patterns during the previous two declines.
Notably, both previous bearish moves ended at their respective 1.382 Fibonacci extensions before the stock recovered. The current projection points to the same technical level, placing the next downside target at approximately $260.
A daily MACD bearish crossover further supports the Tesla stock forecast, signalling weakening momentum and increasing selling pressure. The same signal preceded the stock’s previous two bearish legs.
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The trading experts also expect the 100-month moving average to support the current decline, following the 200-week MA’s role in cushioning the previous downturn. This level could determine whether Tesla stabilizes before reaching the descending channel’s lower boundary.
TradingShot projects Tesla to fall to approximately $260, marginally above its projected 1.382 Fibonacci extension, before entering the descending channel’s green buying zone.
Concerns around Tesla fundamentals
The bearish technical outlook also comes amid broader concerns about Tesla’s financial performance and valuation.
The electric vehicle maker’s third-quarter 2026 net income declined 44% year over year, while operating income fell approximately 56%.
Although adjusted earnings exceeded analyst expectations, weakening profitability has raised questions about the sustainability of its premium valuation.
Tesla also faces execution risks surrounding its autonomous driving and robotics ambitions, while uncertainty surrounding Elon Musk’s other business interests has contributed to recent volatility.
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Nevertheless, its energy storage operations and potential expansion of robotaxi services remain important longer-term growth opportunities.
Featured image via Shutterstock
