LiAuto, XPeng surge on Tuesday as China mulls more EV incentives
- Li Auto and XPeng all made strong gains on Tuesday in the US session.
- NIO also rose strongly as it gained over 14%.
- Overnight in China EV stocks again hold gains.
EV stocks took the benefit of a benign marketplace on Tuesday as bears returned to hibernation and the equity market finally got its rally on. At the end of the session, the Nasdaq closed up nearly 3%, but EV makers were one of the stronger sectors. XPeng (XPEV) closed up 6%, while Li Auto (LI) closed up 8%. Sector leader Tesla (TSLA), meanwhile, gained 5%.
Li Auto Stock News
The latest hedge fund filings show that Tiger Global took a hefty position in both LI stock and XPEV. Tiger Global doubled its position in the names. Perhaps the hoped-for regulatory agreement between the US and China may have pushed them over the line as delisting fears have led many retail investors to the exit door. The China Securities Journal is reporting that China aims to boost rural car consumption via stimulus measures. China is the world's largest EV market and has high electric vehicle adoption rates. However, recent lockdowns have dented car sales with data for April showing a 35% monthly drop. China has been enforcing strict lockdowns to deal with a covid outbreak. Last week LI stock remained subdued despite an earnings beat as the guidance given was somewhat disappointing. Again though this is likely down to covid enforced restrictions. Demand is not the issue.
XPeng Stock News
XPEV stock is also on the recovery trail, having suffered as it too was added to the list for possible delisting by the SEC. China data as mentioned was disappointing with slowing April car sales, but now with signs that China may be reopening, investors are taking a more optimistic view.
Li Auto Stock Forecast
LI has bounced from the earnings low, and this was also a higher low than March. This could be the formation then of a bottom, but LI will need to break the 200-day moving average at $27.50 to confirm.
LI stock chart, daily
XPEV Stock Forecast
Again here we have a bottoming formation, but it is even better here with a double bottom at $18.23. XPEV needs to break $27, and then the next resistance is at $31.
XPEV stock chart, daily
Like this article? Help us with some feedback by answering this survey:
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
