Tesla Short Sellers Retreat Amid 33% Rally as China Sales Rebound: Short Seller Tracker

$Tesla (TSLA.US)$ shares swung between gains and losses Tuesday, after a 33% rally over the past year sent short sellers packing, as the electric vehicle maker’s sales in China rose in May, weakening the case for betting against Elon Musk’s company.

Trading in borrowed Tesla shares that were sold short fell to 5.28 million Monday, from 6.34 million shares in the previous session. The latest figure, which represented about 10.5% of the shares that changed hands that day, has tumbled by more than half from 14.13 million in mid-April, according to exchange data tracked by moomoo.

Data from the China Passenger Car Association, or CPCA showed Tesla retail sales rose 23% in May to 47,821 vehicles, defying a downturn seen across China’s auto market that hurt the local carmakers. The Asian nation is Tesla’s largest market outside the United States. Better sales there ease one concern that weighed on the stock in 2024 and 2025.

JPMorgan also upgraded Tesla to “Neutral” from “Underweight” and raised its price target to $475 from $145.A price target is an analyst’s estimate of where a stock could trade. The bank cited Tesla’s work in “physical AI” and manufacturing scale as reasons for the change. The change removed one high-profile bearish call from the market.

That decline in short volume means fewer investors are holding bearish bets against the stock. A lower short interest can reduce the chance of sharp rallies driven by forced buying.

Money flow turned positive on June 8, with net inflow of $647.20 million, according to data compiled by moomoo. That trend continued in the first 30 minutes of trading Tuesday, with inflows outpacing outflows by $6.39 million. Money flow tracks whether more dollars are buying or selling a stock.

Yesterday, retail-sized orders labeled “S” made up the biggest piece, with $1.79 billion in inflow versus $1.43 billion outflow. That suggests smaller investors were net buyers that day.

About 61% of existing holders purchased their Tesla shares below the current share price. When more holders are in profit, there is less pressure to sell. The average cost for holders was $403.60, the data shows. Resistance sits at $432.40. That's the price level where sellers have previously emerged.

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