Nio, Inc (NYSE:NIO) was spiking up over 8% on Monday after the company announced it was slashing the prices of its vehicle models by $4,200.

The move higher came in opposition to BofA Securities, JPMorgan and Citigroup lowering their price targets, although the new price targets all came in above Nio’s current share price. Read more here...

Nio was unable to break above Friday’s high-of-day, which saw the China-based EV maker trading in an inside bar pattern.

An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

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The Nio Chart: Nio’s inside bar pattern leans bullish because the stock is trading in an uptrend. Traders and investors can watch for the stock to break up or down from Friday’s mother bar later on Monday or on Tuesday on higher–than–average volume to indicate the pattern was recognized and gauge the future direction.

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Photo: Nio