Tesla's stock charts just flashed a warning sign: the dreaded 'death cross.' This technical pattern, watched closely by investors, suggests potential trouble ahead. But what does it really mean for Tesla, and are we looking at a significant downturn or just a blip on the radar?
Despite a recent 'death cross' forming, Tesla's stock slightly increased on Tuesday, 15 April. The electric vehicle company's shares finished the day up 0.7% at £191.53 ($254.11), contrasting with the S&P 500 and Dow Jones Industrial Average, which both experienced declines.
The 'Death Cross' Explained
This development occurred following the formation of a 'death cross' in Tesla's stock data on Monday. According to Barron's, a 'death cross' indicates that a stock's short-term price trend has fallen below its long-term trend.
Specifically, Tesla's 50-day moving average, around £217.83 ($289), dropped below its 200-day moving average, which sits near £219.33 ($291). This 'death cross' signals to traders that the stock may be slowing down, and it's generally seen as a negative indicator.
Historical Tesla Death Cross Patterns
However, Tesla stock often defies investor expectations. For example, shares surged roughly 90%, or £171.85 ($228) each, in the 30 trading days following the 5 November presidential election. The last time Tesla stock showed a 'death cross' was in February 2024.
Tesla $TSLA formed a Death Cross ☠️ for the first time since February 2024 🚨 pic.twitter.com/3tJI6Pp9yH
— Barchart (@Barchart) April 15, 2025
One month after that, the stock held steady, and after six months, it had increased by 15%. It's important to note that this growth wasn't consistent; Tesla stock hit a low in April 2024, and the 50-day moving average stayed under the 200-day until the end of July.
Subsequently, a 'golden cross' appeared, indicating the 50-day moving average surpassed the 200-day moving average, a positive signal for traders. However, Tesla's stock then took its own course, falling roughly 8% from the 'golden cross' appearance to the 5 November election.
Predicting the impact of this 'death cross' is challenging. Katie Stockton, founder of Fairlead Strategies and a market technician, describes it as a 'lagging indicator,' emphasising its unreliability for precisely timing stock movements.
Factors Influencing Tesla's Stock
As Tesla prepares to announce its first-quarter earnings and moves forward with plans for a new, affordable model and a robo-taxi service, any positive developments could cause Tesla's stock to climb.
This 'death cross' could simply reflect investor unease regarding vehicle sales, CEO Elon Musk's involvement with DOGE, and the effects of tariffs on the worldwide auto market. About half of the new cars purchased in the US come from abroad, and they're taxed with a 25% import tariff.
The Future Of Tesla Stock
Even though Tesla manufactures its cars domestically, it still uses imported components, which are also charged the same 25%. CBS News recently reported that President Donald Trump suggested a potential delay in tariffs on parts, which Wedbush analyst Dan Ives noted in a Tuesday report would benefit Tesla and other US car manufacturers.
However, this prospect didn't significantly lift Tesla's stock. Investors are rightly keeping an eye on tariffs and other potential risks. These concerns appear to outweigh any positive factors, explaining why Tesla's stock had dropped 41% since President Trump's inauguration on 20 January, leading into Tuesday's trading.
