Tesla Stock Falls 4.45% Amid Bearish Death Cross and Oversold RSI, Key Support at $423.50 Tested

Tesla (TSLA) Current Price Action and Technical Analysis

Tesla (TSLA) closed at $433.09 on October 7, 2025, down 4.45% from the previous session’s $453.25. The recent price action reflects heightened volatility, with a 5-day range from $395.94 to $470.75. Key support levels emerge at $423–$430 (prior consolidation zones), while resistance remains at $453–$462 (recent highs). A bearish engulfing pattern formed on October 7, with a large real body and long upper wick, suggesting short-term bearish momentum.

Candlestick Theory

The recent candlestick pattern—a large bearish candle with a long upper shadow—indicates rejection at higher levels, aligning with the 50-day moving average ($437.50) acting as a dynamic resistance. Key support levels at $432.45 (October 7 low) and $429.83 (October 3 close) may test buyers’ resilience. A break below $423.39 (September 25 low) could trigger further declines toward $416.57 (September 18 low).

Moving Average Theory

The 50-day MA (currently ~$437.50) has crossed below the 200-day MA (~$425), forming a bearish “death cross” signal. Short-term momentum is bearish, with the 10-day MA at $435.50 also declining. However, the 200-day MA remains above the 100-day MA (~$420), indicating a mixed trend. The price’s proximity to the 50-day MA suggests a potential rebound if buyers step in at $432.45, but sustained weakness below $425 could confirm a downtrend.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line (-$2.50) crossing below the signal line (-$1.20), reinforcing bearish momentum. The KDJ Stochastic oscillator shows the %K line at 15 and %D at 20, entering oversold territory (below 30). This suggests potential for a short-term bounce, but divergence between price and oscillator (price making new lows while %K fails to do so) raises caution about a deeper decline.

Bollinger Bands

Volatility has expanded, with the 20-day Bollinger Bands widening to $420–$470. The price closed near the lower band ($432.45), indicating oversold conditions. A retest of the lower band could trigger a mean reversion trade, but a break below $420 would signal increased risk of a breakdown.

Volume-Price Relationship

Trading volume surged to 102 million shares on October 7, the highest in a week, confirming the bearish move. However, volume has declined in recent sessions (e.g., 85 million on October 6), suggesting waning bearish conviction. A divergence between rising volume and falling prices could hint at a potential short-term bottom.

Relative Strength Index (RSI)

The 14-day RSI stands at 30, confirming oversold conditions. While this may suggest a near-term rebound, historical context shows RSI frequently dips below 30 during Tesla’s volatile swings without sustained reversals. A close above $435.50 (10-day MA) would be needed to validate a bullish breakout.

Fibonacci Retracement

Key Fibonacci levels from the recent $370–$470 range include 38.2% at $423.50 and 61.8% at $443.50. The current price near $433.09 is testing the 38.2% retracement, a potential support zone. A break below $423.50 could target the 23.6% level at $416.50, while a rebound above $443.50 would negate bearish momentum.

Backtest Hypothesis

The backtest strategy of selling Tesla when RSI exceeds 70 (overbought) and exiting when it falls below 70 (2022–2025) demonstrated exceptional performance, generating 118.34% returns versus 47.30% for the benchmark. This aligns with Tesla’s volatile nature, where overbought conditions often precede corrections. Current RSI at 30 supports the strategy’s exit rules, but recent price action near Fibonacci and Bollinger Band levels suggests a potential short-term rebound. Integrating RSI signals with Fibonacci retracement could refine entry/exit timing, though divergence in KDJ and volume warrants caution.