NIO near the support area

In our previous May 31, 2021 article on Nio (NYSE: NIO), we argued that the stock is in the process of all-time low correction. Nio is a Chinese electric car manufacturer based in Shanghai. The stock sees a meteoric rise since it debuted on  September 2018 at NYSE. We have suggested previously that due to mounting competition in China’s electric vehicle market as well as unsustainable valuation, it needs some profit taking and healthy pullback. Fast forward 6 months later, we see a 70% correction from the all-time high of $67, quite e hefty correction. Below we will update the Elliott Wave outlook for the stock.

NIO monthly Elliott Wave analysis – 02.14.2022

Nio went to public on September 2018 and priced its shares at $6.26. Within a span of slightly more than 2 years, the stock saw almost 1000% increase from the IPO price when it hit the all-time high of $67 on January 11, 2011. Since then, the stock has retreated sharply. It is currently down 70% from the all-time high but as we can see from the monthly chart above, it is near the support area of $10.5 – 19.00. This is when the pullback reaches 100% – 123.6% in 3 swing from the all-time high of January 11, 2011 peak. From this area, the stock can see at least a 3 waves rally if not beginning a new bullish leg.

NIO weekly Elliott Wave analysis – 02.14.2022

Downgrading to the lower time weekly time frame, we can see that the pullback in wave ((II)) is in the form of a zigzag structure. The rally to $67 ended a Grand Super Cycle degree wave ((I)). Then Grand Super Cycle wave ((II)) pullback is in progress to correct the entire rally from all-time low. Down from wave ((I)), wave (a) ended at $31.91 as an impulse. Wave (b) ended at $55.13 as an expanded flat. Finally wave (c) lower is in progress as a 5 waves impulse where another push lower is possible into the $10 area before the stock find supports.