DailyPlay – Opening Trade (TSLA) – April 10, 2025

TSLA Bearish Opening Trade Signal

Investment Rationale

Tesla (TSLA) stock surged Wednesday amid a sharp rebound rally in the broader market. Despite the strength of this move, TSLA presents a compelling bearish setup as near-term growth expectations appear overextended relative to its operational execution and margin sustainability. A softening global EV demand environment, intensifying price competition in key markets, and lingering concerns around capital allocation toward AI and robotics initiatives create fundamental and technical headwinds. Additionally, TSLA’s recent underperformance relative to peers and the Nasdaq 100 reflects weakening investor conviction. With valuation stretched well above sector norms, the stock offers limited margin for error and remains vulnerable to downside reversion in the months ahead.

TSLA recently broke below key support near $260, confirming a lower high on the daily chart and reinforcing its broader downtrend. The 50-day moving average continues to slope downward and has repeatedly acted as resistance, while relative strength versus QQQ continues to deteriorate. A gap zone below $220 remains a potential downside target should selling pressure resume, with the next major support level near $190. Momentum indicators remain weak, and the break beneath trendline support points to a continuation of bearish price action.

Recent financial trends highlight a decelerating growth profile and compressing profitability, driven by aggressive pricing strategies and sluggish global EV demand. Tesla’s pivot toward long-term AI and autonomy initiatives introduces new uncertainties around near-term earnings visibility.

• Forward PE Ratio: 104.57 vs. Industry Median 15.4
• Expected EPS Growth: 12.3% vs. Industry Median 18.5%
• Expected Revenue Growth: 6.41% vs. Industry Median 13.1%
• Net Margins: 7.6% vs. Industry Median 14.6%

We will look at buying a bear put vertical spread using the May 2, 2025 $265/$220 spread. This trade offers directional downside exposure while limiting risk, allowing time for the bearish thesis to play out. It carries a defined maximum loss while minimizing the impact of short-term volatility. ​​Be aware that there is an earnings call on Apr 22, 2025 which is prior to the expiration of this option strategy.

TSLA – Daily

Trade Details

Strategy Details

Strategy: Long Put Vertical Spread

Direction: Bearish Debit Spread

Details: Buy to Open 2 Contracts TSLA May 2 $265/$220 Put Vertical Spreads @ $13.03 Debit per Contract.

Total Risk: This trade has a max risk of $2,606 (2 Contracts x $1,303) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $1,303 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Mildly Bullish/Bearish

Relative Strength: 10/10

OptionsPlay Score: 141

Stop Loss: @ $6.52 (50% loss of premium)

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Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

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