Can Tesla And Nio Sustain Recent Bullish Moves?

On Monday, Tesla Inc TSLA broke bullish from two chart patterns and skyrocketed up over 12% by the end of Tuesday’s trading day. Nio Inc NIO has lagged behind its larger competitor but on Wednesday was able to make a bullish break north.

With the bullish chart patterns looking to be confirmed, traders and investors may be wondering what's next for the two electric vehicle manufacturers.

The Tesla Chart: Tesla opened up 1% higher Wednesday, putting the share price in the gap it left behind on Feb. 22. That gap is now filled, which is good news for both the bears and the bulls as gaps on charts are filled 90% of the time.

With the gap out of the way, Tesla’s stock may go into a consolidation pattern as, with the big bullish move upwards Monday and Tuesday, it's too far extended from both the eight-day and 21-day exponential moving averages (EMAs). On Wednesday morning Tesla’s stock also wicked off and rejected upper resistance at the $780 mark.

Bulls want to see Tesla’s stock consolidate under resistance in a bullish pattern, similar to the bull flag Tesla completed from March 30 to April 9, for a push up over resistance at $780.10. Tesla’s stock could then make another bullish move north towards its next resistance level at $837.28.

Bears want to see Tesla’s stock continue to reject the upper resistance and fall into a bearish consolidation pattern. If the stock fails to make a break over resistance in the coming days, it can fall back down support at $718.16. If it can’t hold that support level, it’s headed back to $655.90.

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The Nio Chart: On Wednesday morning, Nio broke up above a triangle it had been trading in since Feb. 24 and immediately dropped back down to retest the triangle’s upper descending trendline as support. Nio’s stock is trading at the eight-day EMA but below the 21-day EMA, which shows bearish indecision.

Bulls want to see Nio’s stock hold the descending trendline of the triangle and for the stock to begin a trek north so the eight-day EMA can cross above the 21-day EMA. If Nio can make that move, it has room to rise up to its next resistance level at $45.29 where it could consolidate before jumping up to the $55 mark.

Bears want to see the triangle negated and for Nio’s stock to fall below the upper descending trendline and continue to be pushed down by it until it loses support at $34.94. If the stock loses that level, there is not much support until $27.39.

NIO and TSLA Price Action: Tesla shares are trading at $758.79, while Nio shares are trading at $37.91.