The Tesla share price decline is gathering pace. The automaker struggles to catch a break as it reports a -27% drop in China sales in April.
The last 4 weeks have not been kind to Tesla (TSLA) investors. The share price has dropped 23% from its 14th of April high to its current $617.50
Previously, Tesla had enjoyed enormous popularity in China, and for many years, was immune to the deteriorating relationship between the two superpowers. It seems that is no longer the case, and amid a slew of negative news from China, the Tesla share price is coming under increasing pressure.
The demand slowdown in its biggest market has also seen the EV giant shelve plans to expand its Shanghai Gigafactory.
TSLA Technical Outlook
In a previous report, I outlined the worsening technical outlook for the stock. The 50-Day Moving average has crossed below the 100-Day.
This bearish signal preceded the current decline. An ascending trendline in place since April 2020 has also been broken on the downside.
The Tesla share price is fast approaching the key 200-Day Moving average at $580. This is a popular indicator of long-term sentiment, and therefore, traders will be watching this level with a keen eye. A failure to hold the marker would suggest that Tesla is no longer in a long-term uptrend and could leave the market open to further declines.
This is not the first time the price has broken below the major trend line. During its early March decline, it crossed the line intra-day and recovered by the close. On the 26th of March, the price once again tested and held the line and subsequently rallied 32% in the 2 weeks after.
Therefore I consider this trend line to be an important one, and if the price can climb back above, it should cancel the immediate bearish outlook.
Tesla Share price Daily Chart
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