Nio, Inc.'s NIO large retail followers have had a testing time ever since the stock hit a near-term high of $55.13 July 1.
Every time it looks like the stock is taking off, it invariably retraces much of the upward move and has been locked in a lackluster phase.
Nio Stock Going Nowhere: Nio started the week on a strong note, gaining 1.8% Monday. Come Tuesday, the stock lost much more than it gained in the previous session and ended down about 3% at $44.96.
It lost another 4.3% on Wednesday before making a comeback on Thursday, when it added 1.5%.
On Friday, the stock came under pressure yet again. During the week, the stock has held in a tight trading range of $42.40-$46.91.
On Wednesday and Thursday, the stock pulled back precariously close to a near-term support around $42.62 but stopped just short of it at $42.68.
On Friday, the stock violated this low and dipped to $42.40. It did fight back and break back above the $42.62 level. Nio shares were trading down 2.25% at $42.70 ahead of the close.
Friday's move is reminiscent of the stock's trajectory on the same day the previous week. After opening sharply higher, the stock retreated, and for the bulk of the session it was locked in the $42.56-$43.09 range. A few times in the afternoon, it attempted to break above the upper bound of the range but its efforts fell flat as bears seized control and took the stock down.
Related Link: Nio Begins Shipping Charging Infrastructure To Norway Ahead Of September Deadline For Commencing Operations of Power Unit
What Lies Ahead For Nio: The stock is now enveloped by its 200-day moving average of $43.20 and 50-day moving average of $42.07. These levels could act as immediate resistance and support levels, respectively.
The next resistance area is around $43.56. For the bulls to regain control, Nio should convincingly move above the next resistance around the $46-$46.50 area.
Further ahead, the stock could stall around another resistance near $48.95.
On any further downside, the stock has supports around $40.98; $35.51, where it completed a triple bottom formation earlier this year; and around $31, where it bottomed in mid-May.
One positive from the technical perspective is the 14-day relative strength index, a momentum indicator, which is currently at 43 and suggests oversold levels — a perfect scenario for bargain hunters to swoop in.
Some of the catalysts that can influence the stock in the near term could be updates on international expansion, a long-rumored budget EV that is reportedly in the works, a Hong Kong listing and July deliveries as well as its second-quarter earnings.
Related Link: Will Nio's 'Power Plan 2025' Stimulate Chinese EV Nameplate's Sales?
Photo: the Nio ES6. Courtesy photo.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
