Tesla Stock Rises: Why Day Traders Should Be Cautious After Gains

Tesla stock rises again, notching its third straight day of gains and closing at $351.67—its highest since late May. The move follows a 6.2% surge on Friday after Fed Chair Jerome Powell’s Jackson Hole speech fueled optimism about rate cuts. With Monday’s 1.9% gain and Tuesday’s additional 1.5% jump, momentum is building. But analysts warn the setup may be getting tricky, particularly for active traders.

Key takeaway: Tesla’s rally reflects optimism about long-term robo-taxi growth, but near-term fundamentals are lagging. For day traders, this creates a high-volatility environment where discipline and caution are critical.

Analyst Cautions After the Run

Baird analyst Ben Kallo reiterated a “Hold” rating with a $320 target, flagging that estimates for Tesla’s second-half performance may be too high. He remains cautious due to weakness in the core automotive business, the potential loss of $7,500 in federal EV credits, and reduced sales of zero-emission vehicle (ZEV) credits. His EPS projections of $1.68 for 2025 and $2.12 for 2026 trail Wall Street’s $1.70 and $2.44 consensus.

Kallo noted that investors are overlooking fundamentals, instead betting on long-term opportunities, such as robo-taxis and the Optimus humanoid robot. This divergence between market sentiment and near-term financial performance is what makes the stock “tricky.”

Momentum, Hype, and the Robo-Taxi Factor

Much of the optimism stems from Tesla’s launch of a self-driving taxi service in Austin in June. Bulls argue that robo-taxis could redefine Tesla’s earnings trajectory. Tesla shares rallied nearly 50% between the October 2024 robo-taxi event and the Austin rollout, only to stall as investors waited for broader expansion.

Expanding the service to additional cities could reignite momentum, but until then, expectations may outpace reality. That gap is where traders can find both opportunity and risk.

Implications for Day Traders

Gap plays: After three sessions of gains, watch for gap-and-fade setups if enthusiasm cools.
VWAP tests: Tesla often respects VWAP intraday. Failure to hold VWAP after early strength can set up high-probability shorts.
Breakout levels: Shares just cleared July highs. Continuation trades could develop above $352–$355 if volume confirms.
Volatility bands: Use volatility bands for scalps; Tesla tends to overshoot and retrace during momentum runs.
News sensitivity: Any update on robo-taxi expansion or policy shifts (EV credits, ZEV rules) can trigger outsized intraday moves.

Year-to-Date Context

Despite the recent strength, Tesla stock remains down about 14% year-to-date. Still, it has gained roughly 63% over the past 12 months, underscoring the volatility and speculative fervor surrounding the EV maker.

Bottom Line

Tesla stock rises on optimism, but analysts warn against ignoring fundamentals. For day traders, the stock remains a high-beta vehicle offering frequent setups—but only if approached with risk control. Momentum is strong, but so is the potential for sharp reversals.