27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
The share price of Chinese electric vehicle maker NIO Inc. ADR (NYSE:NIO) has dropped to a level the sell-side likes given expectations for improving sales, leading two analysts to upgrade the stock.
The Analysts
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Bank of America Merrill Lynch analyst Ming-Hsun Lee upgraded Nio from Underperform to Neutral and lowered the price target from $6.80 to $6.20.
Citigroup’s Jeff Chung upgraded Nio from Neutral to Buy and lowered the price target from $7.20 to $6.80.
The Thesis
Concerns about orders missing guidance and a cut to electric car subsidies by the Chinese government seem to have been priced into the market — and driven Nio’s share price down 47 percent from its early March peak, Lee said in the Thursday upgrade note.
After Nio competitor Tesla Motors Inc. (NSDAQA: TSLA) cut prices. there were concerns that it would negatively affect the Chinese EV maker, but that too is likely now accounted for, the analyst said.
Shipments in the second quarter “may not be robust,” Lee said, but should top the first.
FREE REPORT: How To Learn Options Trading Fast
In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.
Among the positives he named: Nio has a new, six-seat ES8 that is expected to be popular and is closer to delivery on its lower-priced, five-seat ES6. NIO has also lowered its pre-order deposit, which should help demand, the analyst said.
With BofA now expecting sales volume to grow, Lee said the stock’s current value looks fair.
Citi’s Chung also cited the lower valuation in moving to recommend the stock after previously being on the sidelines.
Price Action
Nio shares were trading up 1.13 percent at $5.38 at the time of publication Thursday.
Related Links:
NIO Reveals New Electric Vehicle: 'A Competitive Product In A Premium Segment'
Nio On Roller Coaster Since IPO
Photo courtesy of Nio.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.