Bulls Drive Nio's Stock Higher: What's Next?

Nio Inc’s NIO stock rallied again Wednesday as bullish sentiment in the electric vehicle sector soared.

On Tuesday, Citi maintained its Buy rating on the stock and increased its price target from $58.30 to $72. Nio also announced it had accelerated its battery swap charging station program and opened five more stations in Shanghai. The company has now opened 289 of the 500 battery swap stations it plans to have available in China by the end of the year.

Dozens of options traders also piled into Nio Tuesday morning and purchased massive amounts of call contracts. One trader paid $418,680 for a single order of call contracts with a strike price of $70 expiring Nov. 19.

See Also: How to Buy Nio Stock Right Now

The Nio Chart: On Tuesday, Nio’s stock bust through heavy resistance at the $49.84 mark. The stock has been in a strong uptrend since putting in a bottom at the $30 level, making higher highs and higher lows on the daily chart.

Heavy bullish volume has also entered Nio’s chart and by 11 a.m. over 40 million shares of the stock had already been traded compared to the company’s average volume of 52.91 million over 10 days. Volume can be used to identify momentum on a stock and can indicate higher, or lower, prices may come. High bullish volume helps to confirm a bullish trend and high bearish volume helps to confirm a bearish trend.

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

Bulls want to see continued bullish momentum drive Nio up over its next upper resistance level at $54.56. If it can regain that level as support, it has room to make its way toward $59.85.

Bears want to see bearish volume enter the stock to knock it back down toward its lower support at $49.84. If it were to lose the level and trade back underneath it Nio’s stock could fall toward $45.

NIO Price Action: Shares of Nio traded higher by 5.3% to $53.04 at publication time.