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PreMarket Prep Stock Of The Day: Nio

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PreMarket Prep Stock Of The Day: Nio

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

One of the top performers in 2020, Nio Inc. (NYSE: NIO) announced fourth-quarter results after the close on Monday and is trading deep in the red. The price action in this popular issue makes it the PreMarket Prep Stock of the Day.

See also: How to Buy Nio Stock

About Nio: Dubbed as the Tesla of China, the company operates in China’s premium electronic vehicle market. The company designs, jointly manufactures and sells smart and connected premium electric vehicles, driving innovations in next-generation technologies in connectivity, autonomous driving and artificial intelligence.

Nio A Huge Gainer In 2020: After ending 2020 at $4.02, Nio was almost cut in half in March when it bottomed at $2.11.

Its eight-month winning streak was snapped in December, but the issue rallied to make a new all-time in January at $66.99 and posted its all-time closing high Jan. 11 at $62.70.

Nio Backs Off Ahead Of Q1 Report: Following its all-time-high, the issue held above $60 for a few days but then retreated to $55.67 by Jan. 15.

From there, it mounted another rally but was turned back ahead of its all-time high, only reaching $64.62 before going into a retreat once again. 

It breached $60 two days later and went into a more prolonged decline. The low of this retreat took the issue all the way to $41.66 by Feb. 23.

It managed to crawl its way back to $49.76 on Monday, the day of the quarterly report. 

Nio's Mixed Q4 Report: After the close on Monday, the company announced an adjusted EPS loss of 14 cents, which missed the Street estimate of a 7-cent loss. 

The automaker posted a slight sales beat of $1.02 billion against a $1.01-billion estimate.

The company more than doubled fourth-quarter deliveries year-over-year, from 8,224 to 17,353.

For the first quarter, the company forecast sales in the $1.13 billion to $1.15 billion range and deliveries in the 20,000-20,500range. On a negative note, the company said that chip shortages will hit EV production in the second quarter. 

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PreMarket Prep's Take On Nio: When the issue was being covered on the show Tuesday, it was trading off the premarket low and was hovering in the lower $46 handle.

Neither host of the show was impressed with the premaket action. "The issue is in no man’s land," said co-host Dennis Dick. 

The author of this article suggested that if the issue was not able to get into the lower end of Monday’s range ($47.63), there was more downside to come.

The hosts concurred on the next two possible support levels: the minor support at Friday’s low ($44.62) and the major support at the low of the move at $41.66.

NIO Price Action: After a lower open, Nio attempted to reach Monday’s low ($47.63), only reaching $47.13, and resumed its move lower.

The stock ended Tuesday's session down 13% at $43.29. 

The full discussion on the issue from Tuesday’s show can be found here:

 

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