Nio’s stock has suffered from a steep downtrend since reaching a July 1 high of $55.13. That may be set to change, however, because this week Nio has created a bullish pattern on the daily chart.

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The Nio Chart: On Monday Nio fell through a support level near the $34 mark but didn’t get any bearish follow-through on the move and bottomed out at $33.28. The stock backtested the level again on Tuesday and Wednesday and held above it, which created a bullish triple bottom pattern.

On Thursday, Nio popped back up over the $34 resistance, fell slightly lower when profit takers came in and then bulls bought the dip and the stock began heading toward a higher resistance level at $36.56. Nio opened the trading day above Wednesday’s high, which created a lower gap on the chart.

Nio also has a gap above between $39.52 and $40.53. Gaps fill 90% of the time so it's likely Nio will trade up into the range in the future.

If Nio can break up above the Oct. 1 high of $36.67, it will create a higher high on the daily chart, which will indicate the downtrend is broken. Bulls will then want to watch for a higher low on the daily chart for confirmation of a trend change.

Nio is trading above the eight-day exponential moving average (EMA) but below the 21-day EMA. If Nio’s stock can then regain the $36.50 level as support and stay above it for a period of time the eight-day EMA will cross above the 21-day, which would be bullish. The stock is trading well below the 200-day simple moving average, however, which indicates the stock has a lot of work to do before overall sentiment turns bullish.