Nio stock keeps falling as EV sector needs charging

Nio stock falls again on Friday by over 6% as the EV sector continues to suffer.
NIO down yet again in Monday's premarket at $18.05, 3% lower.
EV sector is one of the worst-performing sectors so far this year as investors flee high growth.

Ivan Brian FXStreet

Nio stock (NIO) was down again on Friday as the EV sector remains under increasing pressure from the overall bearish stock market. The sector saw losses from Tesla, Rivian and Nio, while Lucid managed to buck the trend and closed flat on Friday. Monday looks increasingly bearish with LCID, RIVN and NIO all indicating dropping over 1% on Monday, while Tesla is indicating a loss of 0.7%.

Nio Stock News

Last week we had delivery data from Nio that was ok but did show a monthly fall. However, the that was due to the Lunar New Year in China. Other Chinese EV names showed a similar February fall, but Warren Buffet-backed BYD did show that it is selling significantly more vehicles than other Chinese start-up competitors. Tesla got approval from the regional German government for its Giga Factory in Berlin, but that failed to push the stock higher as geopolitical worries continue to spook investors.

NIO shares are due to begin trading in Hong Kong this Thursday in a secondary listing for the company. Nio staged some test drives of its new ET7 Sedan over the weekend according to CNEVPost. The company said customers were impressed with the acceleration and handling of the new car.

Nio also saw its investment in Pony.ai likely increase as the company unveiled its latest valuation, according to one post.

Possibly the most significant move last week was Rivian falling to new all-time lows and breaking $50. We had forecast this and saw the move through $50 accelerating due to the likelihood of stops below that level.

Nio Stock Forecast

Nio just about held the low from last week at $18.47, but for how long can it do so? This could raise the possibility of a bullish double bottom, but that is in doubt. Rivian breaking below $50 will surely see more selling pressure on the sector. As pointed out, breaking there will see the volume gap come into play and a likely sharp move to $15. We still have a declining price, Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).

NIO stock chart, daily

The author is long NIO.

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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.

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