NIO Stock News and Forecast: Bullish wedge breakout targets $54.86 as Citi counts on 50% upside

NIO breaks out of wedge formation in a strongly bullish move.
Delivery data from NIO and peers remains strong.
Citi says there could be 50% upside to the stock.

Ivan Brian FXStreet

NIO continues to gain momentum following its breakout of the wedge formation. A stellar appreciation in 2020 (over 1,000%) has worried investors as to whether the hype and gains could be lived up to. However, a string of positive delivery announcements from NIO, LiAuto (LI), XPeng (XPEV), and others have kept Chinese electric vehicle manufacturers strongly supported by investors with the sector seeing major gains on Monday. Last week's strong delivery data saw NIO catch a very bullish upgrade from Citi. The investment bank said it sees the potential for 50% upside in the shares and that it expects "a strong demand recovery from late Apr-21 in China [...] and NIO's monthly new order volumes in May-Jun to be 20-30% higher than the average monthly level in 4Q20 peak season." Xpeng CEO Brian Gu said last week after his company's strong delivery numbers, “We are on track to meet or exceed Q2 delivery numbers, which I think means Chinese EV demand is still very strong.” Li Auto was not to be denied and also posted further strong sales numbers again on Wednesday. Deliveries of the company's Li ONE car rose by 101% YoY, and NIO closed up 4% at $43.68.

NIO stock forecast

Breaking out of the wedge formation is a bullish move and was backed up by the 9 and 21-day moving averages being broken also. Even more, momentum was given by the break of the long-term 200-day moving average. The first test will be resistance at $47.13 with $54.86 being the target of the wedge breakout. Support comes just under the $40 level from the top of the wedge formation. Obviously, breaking this level ends the bullish argument.

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.

GBP/USD edges lower below 1.3650, with eyes on US PCE data

GBP/USD trades with a negative bias below 1.3650 in the European session on Wednesday, eroding a part of the previous day's strong gains. The pair, however, remains within striking distance of a six-month top, set last Friday, as traders keenly await the release of the US Personal Consumption Expenditures (PCE) Price Index data for a fresh impetus.

EUR/USD holds lower ground near 1.1650 ahead of key US data

EUR/USD is holding lower ground toward 1.1650 in Wednesday's European session. The US Dollar is recovering modestly amid profit-taking and Middle East uncertainty. US inflation, tracked by the PCE, and another revision of Q2 GDP data should keep investors entertained on Wednesday.

Gold remains depressed below $4,650 on firmer USD; looks to US PCE for Fed rate outlook

Gold sticks to modest losses below $4,650 heading into the European session, though it lacks bearish conviction and remains confined within the previous day's broader range. The US Dollar regains positive traction amid some repositioning ahead of the US Personal Consumption Expenditures Price Index and is seen as weighing on the commodity. Adding to this, Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole Symposium on Friday might offer more cues about the interest rate path.

Dogecoin, Shiba Inu, Pepe: Profit-taking cools last week’s rally

Meme coins, including Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE), are losing their bullish momentum after last week’s double-digit gains. Facing downside pressure amid profit-taking, DOGE and PEPE risk further decline while SHIB holds at a support level.

US core PCE inflation set to keep pressure on the Federal Reserve to hike interest rates

The United States Bureau of Economic Analysis is expected to publish the Personal Consumption Expenditures (PCE) Price Index data for July on Wednesday, at 12:30 GMT. PCE inflation data for July is expected to reveal that price pressures remain high, well above the Fed’s 2% target.

Canada hits US goods with tariffs; The rate market sees a problem

On September 8, Canada begins charging its own importers 15%, 25% and 50% on roughly 700 lines of American goods. The measure is billed as dollar for dollar, and on the arithmetic of covered trade it is. What it is not is a tax on the United States.