After Four Red Days in a Row, Is Tesla’s Rally in Trouble?

Core Viewpoint - Tesla Inc. shares have experienced a notable decline, closing lower for four consecutive sessions after reaching an all-time high, with a decrease of nearly 8% since the peak just before Christmas [2][6]. Group 1: Market Performance - The recent pullback in Tesla's stock is particularly striking given the overall market is near record highs, raising questions about whether this is a healthy pause or a sign of waning momentum [3]. - Despite the recent decline, Tesla's stock has increased over 100% since April, and the long-term uptrend remains intact, with no major trend structures broken [3][4]. - A pullback of this magnitude is not unusual and aligns with previous patterns seen throughout the year, as profit-taking often follows significant milestones [4]. Group 2: Technical Analysis - The stock could potentially fall another 8% and still remain within a rising trend channel that has supported its movement since spring, suggesting the recent selloff may be more about digestion than a breakdown [4]. - Tradesmith's Health Indicator, which measures stock price health based on volatility, indicates that TSLA stock has been in the green zone for four consecutive months, supporting the notion of a healthy trend [5]. Group 3: Market Sentiment - The occurrence of four consecutive lower closes suggests that there may be more at play than just short-term profit-taking, indicating sustained selling pressure and a shift in market sentiment [5][6]. - The bears appear to have gained control over the stock, indicating a potential shift in the balance of power between buyers and sellers [7].