Tesla (NASDAQ: TSLA) shares recently experienced a sharp pullback, dropping 8.3% to close at $440.12, their steepest decline in months. This drop coincided with a broader market selloff, as the Nasdaq Composite and S&P 500 fell 3.5% and 3%, respectively.
Despite this short-term setback, technical indicators and long-term growth factors suggest Tesla remains well-positioned to rally toward $1,000 by the end of 2025.
Technical analysis highlights bullish patterns
Notably an analysis by TradingShot highlights key patterns in Tesla’s stock movement that indicate the pullback may be a temporary pause in a longer upward trajectory.
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The analysis notes that Tesla recently broke above the ‘Pi Cycle trend-line 1’, a key resistance point throughout much of its historic rise, and reached the 0.618 Fibonacci retracement level at $480, a strong short-term resistance cluster.
While this level could prompt some investors to take profits, any pullbacks are seen as potential buying opportunities, as Tesla appears to have entered its ‘Parabolic Rally’ phase.
‘Channel Up’ pattern sets $1,000 target
Tesla’s long-term price action aligns with a Channel Up pattern, defined by Fibonacci retracement levels and the 50-week moving average (1W MA50), which acts as a key support during parabolic rallies.
Historically, Tesla has traded significantly above the 1W MA50 during previous rallies, using the ‘Pi Cycle trend-line 1’ as loose support.
The analysis suggests that a move toward the 1.382 Fibonacci extension level would place Tesla’s stock in the $700 to $1,000 range by the end of 2025.
While this would elevate Tesla’s market capitalization to unprecedented levels, achieving such heights may hinge on the company successfully expanding its product line into artificial intelligence (AI), robotics, and autonomous technologies.
Why TSLA is expected to climb higher in 2025
Tesla is set to see significant growth in 2025, supported by both political tailwinds and strong business fundamentals.
Under the Trump administration, deregulation efforts are expected to ease legal and compliance burdens for Tesla, including the rollback of crash reporting requirements and the potential fast-tracking of autonomous vehicle approvals.
On the business side, Tesla is well-positioned to benefit from the ramp-up of its Cybertruck and the potential launch of an affordable EV model, which would boost production volumes and market share.
At the same time, cost reductions in its flagship models, such as the Model 3, Model X, and Model Y, along with increased factory utilization, are expected to support profitability.
Moreover, Tesla’s expansion into new markets and the growth of its energy generation and storage division further strengthen its revenue base. Advancements in AI, including the development of the Optimus robot, add another layer of diversification to Tesla’s income streams,
However, challenges remain. Tesla’s high valuation, sales volatility, potential delays in Full Self-Driving (FSD) approvals, and geopolitical risks pose challenges.
While the removal of U.S. EV tax credits could dampen demand, Tesla’s strong competitive positioning allows it to better absorb such impacts compared to its rivals.
That being said, Tesla’s recent pullback appears to be a temporary dip within a broader upward trend, backed by strong technical indicators and solid fundamentals. This could present a buying opportunity for investors as the company continues its growth trajectory.
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