Nio Stock News and Forecast: Will NIO find support at $15.03?

Update: Nio stock plunged another 6% to $15.10 on Monday morning. The Chinese EV producer is down 55% this year and 39% in the past month. There is support at $15.03, which may hold. It seems more likely, however, with the raft of current negatives in the macro environment – Chinese covid shutdowns, higher US interest rates, worries over the possibility of China aiding Russia against Ukraine and facing future sanctions, higher commodity prices, semiconductor shortages, higher inflation, US government scrutiny of Chinese equities, Chinese government scrutiny of its tech sector – that Nio shares will drop even further. The only support in sight is the gap higher in the summer of 2020. This gap transitions from $9.40 to $10.70, and markets do love to fill a gap.

Nio stock (NIO) fell sharply again on Friday as the continued dumping of Chinese tech stocks saw another leg lower. NIO and others have taken a significant hammering this year, and the selling pressure shows no sign of abating. Investors must be selling and removing NIO from their screens and are unlikely to return. NIO stock is down 65% over the last year and as mentioned above is down nearly 50% for 2022.

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NIO Stock News

This one is really beginning to look more and more uninvestible right now. While NIO was not one of the stocks named by the SEC for potential delisting, it is this that has caused the latest panic selling in nearly all Chinese names. Alibaba finds itself trading at $86.70, having been well above $300 back in October 2020. That seems a long way back in time now and a different landscape altogether. BABA was preparing to spin off its ANT Group payment subsidiary, but the deal fell through at the last minute due to government scrutiny. Since then it has been largely one-way traffic for practically all Chinese technology stocks.  DiDi Global (DIDI) also failed to get the all-clear signal from Chinese authorities to list in Hong Kong.

The situation for Chinese stocks deteriorated further overnight as COVID-19 restrictions in numerous parts of China were enacted to curb the spread of the virus. While the rest of the world has dealt with covid through vaccination and gaining herd immunity via mass infection, China has taken a stricter approach, meaning more lockdowns are likely.

At least NIO appears to have found one buyer in the form of Norges Bank, the strategic investment fund of Norway. The latest filing shows it held 13.7 million shares in NIO at the end of Q4, an increase from the 10.5 million shares it held at the end of Q3. 

NIO Stock Forecast

$15.03 is the next support, but that is unlikely to hold. NIO shares are down sharply in Hong Kong overnight and that will feed through to sentiment in the US.