Nio Stock Forecast: NIO shares explode 9.10% to two-month highs

• NIO stock rises 9.10% on Tuesday, settles above $22. 
• Nio Inc. released more details about its ES7 luxury SUV.
• ES7 offers a 150kWh premium model that lasts 850Km.

Update: NIO stock extended the previous surge and hit the highest level in two months at $23.10 on a turnaround Tuesday, tracking the solid correction across the major Wall Street indices. The stock price of the Chinese Electric Vehicle (EV) maker rallied 9.10% to settle the day $22.66. Several research firms believed that NIO stock price has bottomed out and reassessed their price target to set a ‘buy’ rating for the company. The encouraging news shot the stock price through the roof.  Citigroup cut its target price on NIO from $87.00 to $41.10 and set a “buy” rating on the stock in a report on Tuesday. Meanwhile, the latest data from MarketBeat showed that the stock presently has an average rating of “Moderate Buy” and an average price target of $42.91. All eyes now remain on Fed Chair Jerome Powell’s testimony before the Congress for fresh trading impulse.

Nio (NIO) stock has advanced 6% in Tuesday's premarket to $22 on the heels of positive news surrounding a new SUV. The stock has been doing well alongside the rest of the Chinese tech sector after news emerged late last week that Chinese regulators had decided to allow Ant Group to file paperwork to become a financial holding company, one step on its way to resurrecting its IPO. Ant Group's scheduled IPO in November 2020 was nixed by regulators, an episode that saw Nio and the broad Chinese tech sector sell-off in extreme fashion due to government scrutiny.

Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries

Now the introduction of the ES7, Nio's most prominent luxury SUV model, is turning heads and bringing the Chinese automaker back into the spotlight.

Nio Stock News: ES7 presentation

The ES7 comes equipped with a 75KWh battery but can be upgraded to a 150kWh long-range version. 150kWh is impressive and makes this vehicle one of the longest range options in the world for passenger vehicles. Nio says the 150kWh option can travel 850Km before it needs to be charged. Charging may not be necessary, however, as Nio now operates 1,000 battery swapping stations throughout China.

The ES7 is Nio's fastest SUV to date, going from 0 to 100KM an hour in under four seconds, and is also licensed as one of China's first passenger vehicles allowed to tow a trailer. Additionally, the SUV has a camping mode that allows the battery to be utilized as a power source for non-vehicle uses like flood lights or speaker systems. The ES7 can be purchased for as little as $51,800 for the battery as a service option. The 75kWh version goes for $69,700 before subsidies, and the 150kWh version goes for a hair over $81,600. Deliveries begin on August 28 but can be ordered now.

Nio Stock Forecast: $30 is the near-term target

With NIO stock finally breaking back above $20 after a long sojourn in the teens, the next stop is $24.33. This was the range high from early April. From there the next stop for NIO is the 50-day moving average which now sits at $29.77. $30 is not itself a resistance level, but rather the entire region from $27 to $34 is a major volume region. Getting through that thicket could take some time for NIO shares. Expect any move to this price area to bump up against major obstacles and fail to drive through it on the first try. The descending trend line that has been working since mid-January sits near $26 now and may also act as a barrier to any rally.

Nio stock does not have much in the way of support, however. The closest to real support is likely either $15 or $13, which would require a circa 40% drop from current levels. The good news is that the Moving Average Convergence Divergence (MACD) indicator has crossed over and seems to be inching higher. This foretells a period of advancing price action.

NIO weekly chart

Previous updates

Update: NIO stock settled at $22.66 on Tuesday, up 9.31%. Wall Street returned with optimism from the long weekend, as recession fears eased, or better said, moved to the background ahead of further data. Wall Street posted substantial gains, with the Dow Jones Industrial Average adding 641 points, and the S&P 500 finishing the day 2.45% higher. The Nasdaq Composite settled at 11,069, up 2.51%. The market's attention now shifts to US Federal Reserve chief Jerome Powell, due to testify on the Semi-Annual Monetary Policy Report before the Senate Banking Committee on Wednesday. His pre-prepared remarks will be released beforehand. 

Update: Nio stock performed better than its buoyant premarket self. NIO shares traded up to 9.5% in $22.74 about an hour into Tuesday's session. Some of this is due to the long weekend caused by the Juneteenth holiday that allowed for some pent-up demand to spring forth all at once. Additionally, news of the spectacular unveiling of the ES7 model is giving investors the idea that Nio's best days are coming in the second half of the year. Also, it is not a side not that the Nasdaq is up 3.1% at the same time as investors are giddy at the low prices caused by last week's sell-off. 1,470 call contracts expiring on July 1 with a $23 strike price have exchanged hands on Tuesday morning thus far, the last of which for $1.03 (77% higher than Friday).