Tesla Stock Rises. Why Shares Could Be Headed for a Breakout.

Coming into Monday trading, Tesla shares were down about 16% year to date and up about 54% over the past 12 months. (Getty Images)

Tesla stock ended comfortably in positive territory as shares aim for four consecutive weekly gains this week.

The electric-vehicle maker’s stock traded as low as $335.03 before recovering to $346.60, for a gain of 1.9%. The S&P 500 and Dow Jones Industrial Average lost 0.4% and 0.8%, respectively.

It was the stock’s highest close since June 23, the day after the company launched its robotaxi service.

News that the $7,500 federal EV purchase tax credit might be around a little longer than expected could have helped. Recently, the Internal Revenue Service said that if an EV buyer signs a contract by Sept. 30, they will lock in the tax benefit, even if the car isn’t delivered by Sept. 30, when the credit is due to end.

Still, the IRS notice was posted on Thursday, making it unlikely that it was lifting the stock on Monday. And even if car buyers are getting a little more time to take advantage, the credit is going away, making EVs less affordable.

The Monday move comes after shares jumped 6.2% on Friday. Most stocks gained; the Nasdaq Composite was up 1.9% following Federal Reserve Chair Jerome Powell’s Jackson Hole speech, which appeared to indicate more interest-rate cuts were coming soon.

That sent Tesla stock up 2.9% for the week, its third consecutive weekly gain. The move above $338 is important, according to Mark Newton, head of technical strategy at Fundstrat. He believes Friday’s gain past that level, around highs reached in July, could signal a breakout.

Newton isn’t making a fundamental call on Tesla stock. His view is based on looking at market history and stock charts to identify inflections in investor sentiment.

Tesla stock has been above $338 a couple of times recently, but failed to get much beyond that. Future Fund Active ETF co-founder Gary Black says that the removal of the safety monitor in Tesla’s robo-taxi service; robo-taxi expansion to other cities; and more, lower-priced Tesla models could be the fundamental factors that send shares higher.

Tesla launched a robo-taxi service in Austin, Texas, in June. The launch was modest, with a handful of Model Ys ferrying handpicked customers around a limited section of Austin. A human safety monitor still sits in the front passenger seat to ensure smooth operations.

The company is managing the launch carefully, but CEO Elon Musk still has big plans for the service. He said in July that Tesla robo-taxis could cover half the U.S. population by the end of 2025. Austin represents less than 1%.

Investors have been very focused on self-driving cars lately, believing they will usher in a new era of earnings growth for the company. More car sales could help, too. Tesla’s global sales fell about 13% year over year in the first half of 2025. The company is planning to launch a lower-priced Model Y in the coming months to try to help arrest the decline.

Black suggests other models, such as a smaller SUV or a midsize pickup truck, would be more helpful than a cheaper Model Y, which could steal sales from higher-priced versions of that car.

The new Y is a watch item for investors, but it will probably remain secondary for most investors. They are likely to be watching robo-taxi developments first and foremost.

Coming into Monday trading, shares were down about 16% so far this year and up about 54% over the past 12 months.

Write to Al Root at allen.root@dowjones.com