Charts indicate further downside is ahead for Tesla, auto stocks just as tariff threat emerges

Auto stocks faced a steep sell-off at Monday’s open following the implementation of new tariff policies. Electric and autonomous vehicle companies were hit particularly hard. This newfound struggle for auto stocks could contribute to a broader, long-term trend of underperformance for the industry group, with technical headwinds expected to persist. The Global X Autonomous and Electric Vehicles ETF (DRIV) has been in a sustained downtrend since late 2021, and the chart points to further declines over the intermediate term. After failing to break above long-term trendline resistance, DRIV appears to have downside risk to a long-term support zone closer to $20. The stochastic oscillator is pointing lower with room to oversold territory, and a new MACD ‘sell’ signal increases the possibility of a test of support as geopolitical tensions foster more selling pressure. Tesla (TSLA) is DRIV’s largest holding, accounting for about 5% of its weighting, and it has seen a loss of intermediate-term upside momentum solidified by a breakdown below its 50-day moving average Monday. TSLA reached new all-time highs after we last featured it on December 9 and it has since entered a corrective phase that we expect to continue, ultimately allowing for a more favorable entry point within TSLA’s long-term uptrend. Like DRIV, TSLA has a new MACD ‘sell’ signal and room to oversold levels, suggesting further downside toward support near $350, if not secondary support around $314-$315. With both DRIV and TSLA showing intermediate-term downside potential, the outlook for electric and autonomous vehicles looks tenuous. Key support levels are in play for traditional automakers, as well, with Ford Motor (F) testing previous lows and General Motors (GM) testing its 200-day moving average. Until the technical indicators show improved intermediate-term momentum, we would be managing risk to the downside in auto stocks. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. 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