TSLA's stock price is trading below the 5-day moving average. Should I cut my losses

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TSLA's stock price is trading below the 5-day moving average. Should I cut my losses?

7/1/2025 04:41pm

Aime

The deep research logic is organized as follows: 

Okay, let's tackle this question about Tesla's stock price trading below its 5-day moving average. The user is asking whether they should cut their losses. First, I need to look at the data provided in the references. 

From Reference 1, the closing price on 2025-07-01 is $302.25, and the 5-day moving average (ma5) is $319.65. So, the stock is indeed below the 5-day MA. The last price is $302.28, which is just slightly above the closing price but still below the MA. The last change is a -4.85% drop, which indicates recent selling pressure.

Next, looking at the news articles, there are several factors contributing to Tesla's recent decline. The political feud between Elon Musk and President Trump is a big one. References 3, 6, 13, 15, 16, 17, 18, 19, 23, 24, 34, 36, 37, 44 mention the ongoing conflict, which has caused significant volatility. The threat of losing government subsidies and potential regulatory scrutiny are major concerns. This political risk is a key factor affecting investor sentiment.

Another critical point is the upcoming Q2 delivery numbers on July 2. References 4, 12, 21, 25, 26, 27, 28, 29, 30, 31, 32, 33, 35, 39, 40, 41, 42, 43, 45, 46, 47, 48, 49, 50 discuss the expected delivery figures. Analysts project a decline in deliveries compared to last year, with estimates ranging from 355,000 to 390,000 units. This is a significant drop from Q2 2024's 443,956 units. Weak demand, competition from companies like Xiaomi and Honda, and supply chain issues are mentioned as reasons for the expected miss.

Technical analysis from Reference 20 shows the RSI at 28.75, which is below 30, indicating oversold conditions. However, the stock is still under pressure with a high trading volume of 91.29 million shares. The RSI might suggest a potential bounce, but the overall market sentiment is bearish due to the delivery concerns and political issues.

Analyst ratings and price targets are mixed. Some firms like JPMorgan (Reference 5) have an Underweight rating with a low target price of $115, while others like Benchmark (Reference 10) are more bullish with a $475 target. The average target price is $297, slightly below the current trading price. This divergence shows uncertainty among analysts about Tesla's future.

The user's profile mentions they're interested in tech stocks, prefer blue-chips, and use technical analysis. They're looking for high returns with a medium to long-term horizon. Given that Tesla is a tech stock and a blue-chip, it fits their interest. However, the current technical setup (below 5-day MA, oversold RSI) might be a buying opportunity if the user is looking for a contrarian play. But the fundamental risks (delivery misses, political issues) are high.

I need to balance the technical indicators with the fundamental risks. The user is considering cutting losses, so I should present both sides. On one hand, the stock is oversold, and there might be a short-term bounce. On the other hand, the fundamental issues could lead to further declines if the delivery numbers are worse than expected or if the political situation escalates.

Also, the user's recent questions about high returns and joining Aime's journey suggest they might be looking for a setup with potential upside. The upcoming delivery report is a critical event. If the numbers beat expectations, the stock could rally. If they miss, the decline might continue.

In conclusion, the decision to cut losses depends on the user's risk tolerance and investment strategy. If they're strictly following technical signals and the RSI suggests a bounce, they might hold. If they're concerned about the fundamental risks, cutting losses might be prudent. However, given the potential upside if the delivery numbers surprise positively, holding might be an option for a high-risk, high-reward scenario.

🚨 Conclusion

TSLA is trading below its 5-day moving average (MA5) and faces significant short-term risks due to delivery concerns, political turmoil, and technical weakness. However, the stock also shows oversold conditions and potential upside if upcoming catalysts (Q2 deliveries, robotaxi adoption) exceed expectations.

📊 Analysis

1. Current Technical Setup

Metric	Data (2025-07-01)	Implication
Closing Price	$302.25 ¹	Below MA5 ($319.65) and down 4.85% YoD ¹²
RSI (Relative Strength)	28.75 ²	Oversold (below 30), but bearish momentum persists ²
Trading Volume	91.29M shares ²	High liquidity, but selling pressure dominates ²

tsla closing price < 5-day moving average(1)

Last Price($)	Last Change%	Closing Price($)2025.07.01	ma52025.07.01
302.69	-4.71%	302.69	319.65

Ticker
TSLATesla

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2. Fundamental Risks

Delivery Concerns: Q2 2025 deliveries are expected to drop 10-20% YoY to ~360-390K units ³⁴ Analysts warn of a potential "disaster" in Q2 fundamentals ⁷.
Political Turmoil: The Trump-Musk feud over subsidies and tax policy has caused a 25.5% YTD decline in TSLA ⁸⁹
Competition: Chinese EV giants like Xiaomi (Model Y rival) and U.S. automakers (Honda Prologue) are eroding Tesla’s market share ¹²¹³.

3. Catalysts to Watch

Q2 Deliveries (July 2): A miss vs. consensus (~390K) could trigger further declines ³¹⁵.
Robotaxi Adoption: Tesla’s first fully autonomous delivery in Austin highlights progress, but regulatory risks (NHTSA scrutiny) loom ¹⁷¹⁸.
Earnings (July 18): Analysts project a 19% YoY drop in revenue and 20x+ P/E ratio ²⁰²¹.

4. Analyst Sentiment

Bullish: 14 “Strong Buy” ratings (avg. target: $297) ³¹⁷.
Bearish: 10 “Strong Sell” ratings (avg. target: $215) ³⁶.
Neutral: 15 “Hold” ratings ³¹⁷.

📝 Key Takeaways

Short-Term Risk: TSLA is oversold but faces headwinds from delivery misses, political risks, and competition. Cutting losses may be prudent if you’re risk-averse.
Long-Term Opportunity: The stock’s 34% decline from all-time highs ³¹⁷ and $102B market cap ¹⁹ suggest undervaluation. A successful Q2 delivery report or robotaxi adoption could trigger a rally.

🎯 Final Recommendation

If you’re risk-tolerant and believe in Tesla’s long-term vision (autonomous tech, energy storage), hold or average down. If you’re risk-averse, consider cutting losses to preserve capital until clarity emerges post-Q2 earnings.

Final Call: 🚨 Hold with caution if you’re in for the long haul; 🚫 Cut losses if you’re prioritizing short-term stability.

Source:

1. TSLA Closing Price < 5-Day Moving Average