- Nio stock rose on Wednesday and is up 17% so far this year.
- NASDAQ advances 0.7% on inflation optimism.
- NIO stock rose more than 1% on Wednesday as Tesla announced a factory expansion.
- Excitement over the reopening in China has helped NIO stock price.
Nio (NIO), one of the most promising electric vehicle stocks out of China, has seen its share price advancing at a healthy clip thus far in 2023. The EV manufacturer saw NIO stock climb another 4.5% on Tuesday for an overall advance of 16.7% in January as of Tuesday's closing price. Nio stock lost nearly 70% in 2022, so early year optimism presents itself as a welcome change of pace for long-time investors.
Nio stock is up 1.2% on Wednesday to $11.37 on the heels of Tesla's (TSLA) 2% gain and the NASDAQ's 0.7% advance.
Nio stock news: Receding covid lockdowns lend support to Chinese stocks
Nio stock is not alone in its recent rally. Fellow Chinese EV makers BYD (BYDDY), Li Auto (LI) and Xpeng (XPEV) have also seen their share prices rise this year as US investors have grown optimistic that the current reopening in China seems to be gathering steam. After widespread protests engulfed many Chinese cities late last year, authorities announced a sudden relaxation of covid protections and lockdowns that is expected to boost economic momentum after the virus set the nation's economy to sleep in 2022. Infections and hospitalizations have soared, but with each passing day it appears the government is not reversing the policy. Profitability concerns are still haunting most Chinese EV producers however.
Though Nio cut its December forecast for deliveries due to the lockdowns related to the Omicron variant of covid, the carmaker reported record December deliveries of 15,815 on New Year's day. That news has persuaded at least some in the market that Nio will see a major turnaround of fortunes in 2023. December's delivery figure was up 51% YoY despite all the difficulties related to the lockdowns.
Investors are also fairly excited, and with good reason, to see what type of numbers two newly launched electric SUVs do in 2023. In late December Nio launched both the EC7, a coupe SUV, and the larger ES8 family SUV model.
Nio EC7 / Source: Nio.com
News that Tesla will soon expand its factory in Austin, Texas has also propelled the EV sector forward on Wednesday. Tesla filed a notice with the Texas state government that it will expand the present 10-million-square-foot factory to build at least five new facilities. These include a $59 million die shop, an $85 million drive unit space, a $3.7 million battery cell testing lab, a $260 million cathode facility and a $368 million facility just called "Cell 1". With Tesla stock down about 70% from past highs, the move shows that CEO Elon Musk is not spending much time dwelling on the share price. Despite recent price cuts in China due to a demand shortfall, Tesla continues to expect heavy demand growth going forward, and the rest of the EV space is benefittng from this longer-term view.
In late December Morgan Stanley reitereated its Overweight rating on Nio stock and gave it a $16.10 price target. “We expect that in the coming months the market will refocus on the pace of resurgence in store traffic/order intake," an analyst for the investment bank wrote in a note to clients.
Nio stock forecast
By this point all Nio stock bulls have realized that NIO shares produced a higher low in early January. Between October 24 and November 9, NIO stock clearly broke through support at $9.50 on three separate occasions while respecting the support level during four other sessions. On October 24 Nio shares even plunged to $8.38. On January 3 and 6, however, Nio stock bounced precisely off $9.50 both times. Based on that factor alone, Nio stock should reattempt the $14 high from December 5 sometime this month. The continued rise in the Relative Strength Index (RSI) above the midpoint at 50 also lends credibility to this forecast. Above there sits further resistance points at $16.54 and $22.
NIO daily chart
The author owns shares of NIO.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, 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.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or 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. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.