Here's Why Xpeng Stock Looks Set To Chart Higher After Disappointing November Deliveries

Zinger Key Points
  • Xpeng reversed into an uptrend on Nov. 2 and has since made a series of higher highs and higher lows.
  • The stock is likely to pull back if it breaks up from the inside bar pattern because XPeng's RSI is near overbought territory.

XPeng Inc - ADR XPEV spiked up 8% at one point on Tuesday, showing comparative strength to the general market, which saw the S&P 500 sliding more than 1%.

The Guangzhou-based EV maker reported a sharp decline in November deliveries, rolling out 5,811 vehicles. The number reflected a 63% year-over-year decline and a slight 14% increase from October.

XPeng blamed the situation on COVID-19 challenges and said it expected its deliveries to increase substantially for the month of December.

China’s zero COVID-19 policy has hurt the country’s economy, with strict lockdowns hindering travel in some parts. The Xi-Jinping government recently started to ease some of its harsh restrictions after rare and widespread protests, which could help boost China-based tech stocks and lift beaten-down Xpeng from its lows.

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The XPeng Chart: XPeng opened with an inside bar pattern on Tuesday, with all the price action taking place within Monday’s trading range. The pattern leaned bullish in this case because the stock was trading higher before forming it.

  • XPeng had been trading in an uptrend since Nov. 2, making a consistent series of higher highs and higher lows. The stock’s most recent higher low was formed on Nov. 28 at $6.88 and the most recent confirmed higher high was printed at the $9.55 mark on Nov. 15.
  • The stock hasn’t printed a higher low in six trading days, which indicated an eventual retracement was likely to come in the near future. XPeng’s relative strength index (RSI) also measured at about 67%, which indicated the stock was nearing overbought territory.
  • If XPeng continued to trade within Monday’s range for a few more days, the stock’s RSI would cool down, which could give XPeng the power necessary to eventually break up from the mother bar. If XPeng broke up from Monday’s range later on Tuesday or on Wednesday, the elevated RSI is likely to cause a subsequent drop to at least a higher low.
  • XPeng has resistance above at $13.92 and $16.20 and support below at $11.82 and $10.06.

Read Next: Volkswagen Resumes Partially Halted Production In China: Report

Don't forget to check out Benzinga's electric vehicle page for other articles about the EV industry.

Photo: Courtesy Xpeng

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