You Ask, We Analyze: What To Watch On Nio's Chart After Stock Hits 52-Week Low

On Sunday evening, Benzinga asked its followers on Twitter what they’re buying at the open on Monday. From the replies Benzinga selected one ticker for technical analysis.

@TTTIMOTHYYY47 and @gamma8Flip are buying Nio, Inc NIO. @gamme8Flip said he purchased Nio two years ago at $4 a share and will be watching if he can buy it again at that price.

Nio was expected to print its fourth-quarter financial results on March 8, but on Monday the Chinese electric vehicle manufacturer announced it would delay the report until April as it needs additional time to prepare for capital liquidity disclosures.

On Sunday, Nio announced it had secured approval for a secondary listing on the Stock Exchange of Hong Kong Limited (SEHK) under the stock code “9866,” a move jointly sponsored by Morgan Stanley and Credit Suisse.

Nio, although much smaller in terms of market capitulation, is viewed as a strong competitor to Tesla Inc TSLA and may have more room for growth as it continues to expand globally. Nio also continues to launch new models. The company is expected to unveil its sixth model, its ES7, in mid-April.

Nio’s stock has been beaten down quite heavily since Jan. 11, 2021, when it hit an all-time high of $66.99. Now trading about 68% below that level near the $21 mark, the stock may be showing signs that at least the temporary bottom may be in, although bearish traders can watch for signs a larger downtrend is in the cards.

See Also: Nio-branded Phones In The Works? Rumors Suggest So

The Nio Chart: On Thursday, Nio gapped down to a new 52-week low of $18.47 but bulls came in immediately and bought the dip, which caused the stock to rally 14.7% higher intraday. On Friday, the stock closed almost flat after trading in a tight consolidation range between $21.19 and $21.57.

Nio may be trading in a downtrend although it hasn’t yet been confirmed with a lower high below the high of $23.34 printed on Feb. 17. The move downwards may have been in reaction to a bearish double top pattern when the Feb. 17 high-of-day is paired with similar price action on Feb. 10.

If Nio is able to pop up toward the $24 level over the coming days the downtrend will be negated and the relative strength index (RSI), which is measuring in at about 37% indicates a bounce may be in the cards. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders.

Nio has a gap on its chart between $26.41 and $27.22, which is bullish. Gaps on charts fill about 90% of the time, which makes it likely the stock will trade up to fill that range in the future.

Nio 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 below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see big bullish volume come in and push Nio up into the overhead gap, which will negate the possible downtrend. The stock has resistance above at $21.77 and $23.98.
• Bears want to see big bearish volume come in and drop the stock down to make a new 52-week low, even if that comes after a bounce to the upside. There is support below at $16.75 and $14.31.