Watch These Tesla Price Levels as Stock Plunges After Musk Announces New Political Party

Tesla (TSLA) shares slumped Monday following CEO Elon Musk’s weekend announcement that he plans to start a new political party, reigniting concerns that his political involvement will take attention away from running the EV maker and escalate a public feud with President Donald Trump.

Musk’s announcement came just weeks after the billionaire left his role leading the Trump administration’s cost-cutting Department of Government Efficiency, or DOGE, and said he would refocus on his companies. Musk’s involvement with DOGE was seen by investors as a distraction, and also appeared to tarnish Tesla’s brand in the minds of some consumers.

Tesla shares gained 23% in the second quarter, but trade 18% below last month’s high amid escalating tensions between Musk and Trump over the president’s mega tax and spending bill, which includes the elimination of incentives for green vehicles. After Musk announced the formation of the “America Party” on Saturday, Trump posted on his Truth Social platform that Musk had gone “off the rails.”

Below, we take a closer look at Tesla’s chart and use technical analysis to point out key levels worth watching out for amid the potential for further price swings in the stock.

Selling Accelerates Following Flag Pattern Retest

Tesla shares broke down from a flag earlier this month before shifting gear to retest the pattern’s lower trendline late last week. However, selling accelerated in Monday’s trading session, with the stock falling to its lowest level since early June. Tesla shares fell nearly 7% to around $294, posting the biggest decline in the S&P 500 on Monday.

Moreover, the relative strength index registered its lowest reading since early June, confirming weakening price momentum in the EV maker’s stock.

Let’s identify three key support levels on Tesla’s chart and also locate overhead areas worth monitoring during potential upswings.

Key Support Levels to Watch

The first lower level to watch sits around $285. This area may provide support near the start of the flag pattern, several countertrend peaks that formed on the chart earlier this year, and last November’s election-driven breakaway gap.

Slightly below this level, it’s worth tracking the $265 region. The shares could attract buying interest in this location near two peaks that developed on the chart in October last year.

A more significant drop could see the shares revisit lower support at the $225 level. Investors may seek entry points in this area near a valley that emerged on the chart throughout most of March and April, which also closely aligns with last August’s minor peak.

Overhead Areas Worth Monitoring

During upswings, the shares could initially run into selling pressure around $318. Tactical traders may place sell orders in this location near last week’s flag retest high, the 50-day moving average, and a brief pullback in the stock following last year’s November pop.

Finally, a decisive close above this area could see Tesla shares test overhead resistance at $365. Investors may seek to lock in profits in this region near the May swing high and two closely aligned peaks that formed on the chart last November.

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As of the date this article was written, the author does not own any of the above securities.