Tesla Stock Is Stuck In Reverse – Can Model Y Refresh Shift Gears?

Tesla Inc. TSLA has been spinning its wheels in 2024, with the stock down 31.67% year to date and 8.95% in the past month. The technicals paint a rough picture – Tesla stock is trading below its five, 20, and 50-day exponential moving averages, signaling a strongly bearish trend.

However, buying pressure suggests a potential setup for future bullish movement.

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Tesla Stock Technical Indicators: A Rocky Road Ahead

Tesla stock, at $263.46, sits below its eight-day simple moving average of $268.33, a bearish signal. It remains below the 50-day simple moving average of $316.12 and the 200-day simple moving average of $287.52, reinforcing the broader downtrend.

The Moving Average Convergence Divergence indicator at a negative 12.09 also suggests continued bearish momentum, while the Relative Strength Index of 45.53 indicates Tesla stock is approaching oversold levels but hasn’t hit a rebound zone yet.

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Europe Sales Skid, Wells Fargo Hits The Brakes

Tesla’s sales in key European markets continue to slide, with registrations in France, Sweden, Denmark, and the Netherlands falling for the third straight month, Reuters reported. Denmark saw a staggering 65.6% year-over-year drop in March, while first-quarter figures for France and Sweden hit their lowest since 2021. The numbers reinforce the narrative that Tesla is struggling to fend off intensifying Chinese competition and growing consumer backlash over CEO Elon Musk‘s political stances.

At the same time, Wells Fargo isn’t convinced a turnaround is coming anytime soon. Investing reports that the bank added Tesla to its Tactical Underweight list, making it a conviction short for the second quarter. Analysts cited declining delivery growth, price-cut challenges, and execution risks in Tesla’s autonomous vehicle plans as key concerns. The firm slashed its price target to $130, implying nearly 50% downside.

Model Y Refresh: A Lifeline Or Too Little, Too Late?

Amid the stock’s turmoil, Tesla is gearing up to launch a refreshed Model Y, its best-selling SUV. While the update could help reignite demand, Wells Fargo remains skeptical, arguing Tesla’s ability to drive volume growth is limited without aggressive price cuts. The bank also warns that Tesla’s upcoming “Model 2.5” could cannibalize demand for its other models rather than meaningfully expand its customer base.

With first quarter sales data set for release this week, investors will be watching closely for any signs of stabilization. But for now, Tesla stock remains stuck in reverse, and Wall Street isn’t ready to hit the gas on a bullish call just yet.

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