NIO Stock News and Forecast: NIO triangle formation, breakout will give direction bias
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Subscribe to Premium- NIO drops 2% on Thursday as the Tesla hangover continues.
- NIO still needs to break above moving average resistance.
- NIO shows triangle formation, breakout awaited for further direction.
Update April 15: NIO shares are lower on Thursday as Tesla suffered sharp falls on Wednesday. Tesla was dumped by ARK Invest as they opted for some COIN instead! NIO has formed a triangle formation. Breakouts of triangle formations are sharp and usually the size of the entry range.
Update April 14: Nio Inc (NYSE: NIO) has climbed to $38.48 on Tuesday, closing the session with a 3.6% rise. Wednesday's pre-market data is pointing to an additional increase of 2.2% to $39.32. The upswing places shares of the Chinese electric vehicle marker at the upper end of April's trading range. Will it break higher or drift back to support? Apart from the technical analysis below, it is essential to note that markets are upbeat about growth prospects, especially as US inflation remains weak.
Shares of the Shanghai-based firm dropped by 2.6% on Monday to close at $37.14, and after-hours figures are pointing to further declines. On the other hand, the technical charts provide a more promising outlook.
NIO has been a retail favourite in 2021 with the shares driven to $66.99 in mid-January but has slipped substantially since as investor enthusiasm for the EV sector has waned. Tesla, the sector leader, has been under pressure, and this has spread to the rest of the EV stocks. Not helping the case has been mainstream auto companies announcing plans to move into the EV space.
Stay up to speed with hot stocks' news!
NIO is a Chinese electric vehicle manufacturer designing, manufacturing and selling smart EVs. NIO is also involved in the autonomous driving sector.
NIO stock prediction
Looking at the big picture, all is not great for NIO. We can clearly see the big fall over the last few months. This may be understandable as NIO is still comfortably higher than this time last year. In April 2020 NIO was trading around $3!
Currently, we have a classic bearish series of lower lows and lower highs. Normally, it is not advised to go against this, but there is some reason to consider a bullish position.
The Moving Average Convergence Divergence (MACD) oscillator has crossed over, giving a buy signal on March 31. MACD signals can be a bit difficult to trade as they are often late and backward-looking, but in NIO's case the MACD is also confirming the price trend with a higher low. Divergences are stronger signals for the MACD but the combination of the crossover and confirming uptrend in both price and MACD help the bullish argument. We can see from the chart the upward sloping trend line showing the higher lows made by NIO on March 26 versus March 5.
Two key problems exist. Longer term, we can see how well the moving averages have acted as support and resistance, and we have yet to break the 9 or 21-day moving averages. While some traders may prefer to try and identify the trend earlier and get in now, It is better to wait for a break of the 9-day, with a tight stop below it. Once the 21-day is broken, then you can add to the long position and move stops accordingly. A break of the 9-day moving average (currently $38.34) brings resistance from the 21-day as the next level, currently $40.36. A break here, and we are firmly on for a test of resistance at or near $46.16, the March 11 high.
Getting to the $46.16 level will require some reassessment of the trend and maybe take some of the long position off. Breaking $46.16 brings NIO into a new range of $46.16 to $55.68. $46.16 has seen some trial and error previously, so traders would be advised if long to reduce part of their long positions on the first test or adjust their stops upward.
The shorter-term hourly chart gives more detail. One can more clearly see the MACD crossover and also the triangle formation with diminishing price action. Even without a triangle or pennant formation, reduced price action and volatility eventually leads to a sharp breakout and price moves. Traders must identify which move is more likely and trade accordingly while using stops to manage risk. NIO is giving us more bullish clues than bearish.
A break of a triangle formation is the size of the entry – in NIO's case $8.10. This is our target breakout of $46.48, which also corresponds closely to the high from March 11 ($46.16). Once reached, a new reassessment is required, perhaps reducing long positions or moving up our stop loss to bank some profits on a retracement.
Previous updates
Update April 13: When a supply issue converges with geopolitics, the result is unfavorable. The global chip shortage has prompted the US to pledge investment in the manufacturing of semiconductors, which are in urgent need for the automotive industry. However, the focus on America's industry may weigh on electric vehicle makers in China, the world's second-largest economy and home of NIO Inc (NYSE: NIO).
At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
- NIO drops 2% on Thursday as the Tesla hangover continues.
- NIO still needs to break above moving average resistance.
- NIO shows triangle formation, breakout awaited for further direction.
Update April 15: NIO shares are lower on Thursday as Tesla suffered sharp falls on Wednesday. Tesla was dumped by ARK Invest as they opted for some COIN instead! NIO has formed a triangle formation. Breakouts of triangle formations are sharp and usually the size of the entry range.
Update April 14: Nio Inc (NYSE: NIO) has climbed to $38.48 on Tuesday, closing the session with a 3.6% rise. Wednesday's pre-market data is pointing to an additional increase of 2.2% to $39.32. The upswing places shares of the Chinese electric vehicle marker at the upper end of April's trading range. Will it break higher or drift back to support? Apart from the technical analysis below, it is essential to note that markets are upbeat about growth prospects, especially as US inflation remains weak.
Shares of the Shanghai-based firm dropped by 2.6% on Monday to close at $37.14, and after-hours figures are pointing to further declines. On the other hand, the technical charts provide a more promising outlook.
NIO has been a retail favourite in 2021 with the shares driven to $66.99 in mid-January but has slipped substantially since as investor enthusiasm for the EV sector has waned. Tesla, the sector leader, has been under pressure, and this has spread to the rest of the EV stocks. Not helping the case has been mainstream auto companies announcing plans to move into the EV space.
Stay up to speed with hot stocks' news!
NIO is a Chinese electric vehicle manufacturer designing, manufacturing and selling smart EVs. NIO is also involved in the autonomous driving sector.
NIO stock prediction
Looking at the big picture, all is not great for NIO. We can clearly see the big fall over the last few months. This may be understandable as NIO is still comfortably higher than this time last year. In April 2020 NIO was trading around $3!
Currently, we have a classic bearish series of lower lows and lower highs. Normally, it is not advised to go against this, but there is some reason to consider a bullish position.
The Moving Average Convergence Divergence (MACD) oscillator has crossed over, giving a buy signal on March 31. MACD signals can be a bit difficult to trade as they are often late and backward-looking, but in NIO's case the MACD is also confirming the price trend with a higher low. Divergences are stronger signals for the MACD but the combination of the crossover and confirming uptrend in both price and MACD help the bullish argument. We can see from the chart the upward sloping trend line showing the higher lows made by NIO on March 26 versus March 5.
Two key problems exist. Longer term, we can see how well the moving averages have acted as support and resistance, and we have yet to break the 9 or 21-day moving averages. While some traders may prefer to try and identify the trend earlier and get in now, It is better to wait for a break of the 9-day, with a tight stop below it. Once the 21-day is broken, then you can add to the long position and move stops accordingly. A break of the 9-day moving average (currently $38.34) brings resistance from the 21-day as the next level, currently $40.36. A break here, and we are firmly on for a test of resistance at or near $46.16, the March 11 high.
Getting to the $46.16 level will require some reassessment of the trend and maybe take some of the long position off. Breaking $46.16 brings NIO into a new range of $46.16 to $55.68. $46.16 has seen some trial and error previously, so traders would be advised if long to reduce part of their long positions on the first test or adjust their stops upward.
The shorter-term hourly chart gives more detail. One can more clearly see the MACD crossover and also the triangle formation with diminishing price action. Even without a triangle or pennant formation, reduced price action and volatility eventually leads to a sharp breakout and price moves. Traders must identify which move is more likely and trade accordingly while using stops to manage risk. NIO is giving us more bullish clues than bearish.
A break of a triangle formation is the size of the entry – in NIO's case $8.10. This is our target breakout of $46.48, which also corresponds closely to the high from March 11 ($46.16). Once reached, a new reassessment is required, perhaps reducing long positions or moving up our stop loss to bank some profits on a retracement.
Previous updates
Update April 13: When a supply issue converges with geopolitics, the result is unfavorable. The global chip shortage has prompted the US to pledge investment in the manufacturing of semiconductors, which are in urgent need for the automotive industry. However, the focus on America's industry may weigh on electric vehicle makers in China, the world's second-largest economy and home of NIO Inc (NYSE: NIO).
At the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.