Will Nio's Stock Continue Trekking North? A Technical Analysis

Nio Inc NIO announced Wednesday it received a five-star safety rating from the European New Car Assessment Program for its ES8 flagship SUV model and it plans to introduce the EV to the Norwegian market soon. Norway will be the first country in Nio’s expansion plan to get behind the wheel of the vehicle.

On Friday Samsung SDI Co Ltd SSDIY announced it's targeting Nio and Tesla, Inc TSLA as potential customers of Samsung’s Lithium-ion Phosphate (LPF) battery currently in development. LFP batteries are more cost-effective to produce, safer from fire risks and provide longer life-cycles.

Unlike Tesla, Nio has so far failed to retrace back up toward its Jan. 11 all-time high of $66.99. On Friday, Nio was trading down about 42% from its all-time high whereas Tesla is within about 15% from its Jan. 25 record of $900.

See Also: How to Buy Nio Stock Right Now

The Nio Chart: After reaching its all-time high, Nio’s stock entered into a months-long downtrend until finding a May 13 bottom at the $34.06 mark. The stock then made a steep climb back up and reached $55.13 on June 1 before entering into another downtrend, which brought it to an Aug. 19 low of $36.24.

Since then, Nio has regained an uptrend making consistently higher highs and higher lows with a most recent high of $41.86 followed by Thursday’s low of $37.54. For the uptrend to continue Nio will need to put in a higher high above the $42-mark before falling below the $37.50 area.

On Friday big bullish volume came in and pushed Nio up to a resistance level at $39.61 where it ran into a group of sellers who dropped the stock lower. If Nio closes the day below about the $39.16 level, it will print a bearish inverted hammer candlestick which could indicate Nio will lose its uptrend. If Nio can’t make a new high but doesn’t make a new low, it's possible the stock may consolidate into a symmetrical triangle which would be bullish.

Nio’s stock is trading below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading well below the 200-day simple moving average, which indicates overall sentiment is Nio is bearish.

• Bulls want to see big bullish volume come in and drive Nio’s stock up to make a new high above $39.61. If it can regain the level as support, it has room to move up toward the $45 level.
• Bears want to see continued pressure to the downside to drop Nio below the $37.50 area. If the stock loses the level as support, it could fall toward $36.24.