Tesla stock (TSLA) closed last week at $313.03, down nearly 18% in five sessions and marking its steepest weekly loss since 2022. The selloff followed second-quarter results that paired record revenue with a steep profit miss, breaking the $350 support zone that had held since September 2025. Two separate chart breakdowns now point to $296 as the next downside target, with early premarket quotes on Monday suggesting a modest rebound attempt toward $321.
Tesla Reports Q2 Revenue Beat with Profit Miss and Margin Compression
Tesla reported $28.24 billion in second-quarter revenue, up 26% year over year and above estimates. However, adjusted earnings of $0.33 per share missed the $0.51 consensus, and operating margin sank to 1.4%. Capital spending jumped 142% to $5.79 billion as the company funneled cash into artificial intelligence, Optimus robots, and robotaxi production. Free cash flow turned negative for the first time since early 2024.
Wedbush Securities managing director Dan Ives called the capex surge a timing problem rather than a broken thesis, telling CNBC: "This is an arms race that's playing out and we're only 15% of the way through." Other analysts remain split on whether patience with the AI story justifies the current valuation while margins compress.
Weekly Chart Breaks $350 Support and Tests Two-Year Trendline
The weekly chart shows last week's candle fell 17.81%, slicing through the $350 zone that had acted as support since September 2025. That zone now flips into resistance. Price currently sits on an ascending trendline drawn from the 2024 lows, a line that has defined Tesla's broader uptrend for more than two years. A weekly close below it would mark a structural break.
Below the trendline, the next significant demand zone rests around $260, an area that produced strong reversals in 2024 and 2025. Overhead, $470 remains the major ceiling that has capped every rally since late 2024. Historically, a bullish cup and handle pattern projected a $759 target for TSLA. That scenario only activates on a confirmed weekly close above $470.
Daily Chart Breakdown Projects $296 Target from Channel Exit
Since the May highs near $455, TSLA traded inside a descending parallel channel, respecting both boundaries for almost three months. On July 23, the day after earnings, the price broke below the channel's lower boundary and the $350 zone in a single move. The session printed the highest daily volume in months, which suggests conviction behind the breakdown.
The measured move from the channel breakdown projects a target of $296.16, roughly 5% below Friday's close. That level also sits just under the weekly trendline, making the $296 to $310 area the key battleground this week. If sellers push through $296, the door opens toward the $260 demand zone, another 12% lower. Bulls would need to reclaim $350 and re-enter the channel to invalidate the bearish structure.
FAQ
What caused Tesla stock to fall nearly 18% last week?
Tesla stock fell after second-quarter earnings reported $0.33 adjusted earnings per share, missing the $0.51 consensus, despite revenue of $28.24 billion beating estimates. Operating margin sank to 1.4% as capital spending jumped 142% to $5.79 billion.
What is the next downside target for Tesla stock according to chart analysis?
Two chart breakdowns point to $296.16 as the next downside target. This level comes from a measured move projection after Tesla broke below a descending parallel channel and the $350 support zone on July 23.
What support and resistance levels matter for Tesla stock now?
Tesla stock closed last week at $313.03, testing a two-year ascending trendline from 2024 lows. The $350 zone that held since September 2025 now acts as resistance. Below, the $296 to $310 area is the immediate battleground, with $260 as the next major demand zone if that fails.
