Charting Nio Stock After Chinese Automaker's Q1 Earnings Print: What's Next?

Nio, Inc NIO gapped down about 8% lower to start the trading session on Thursday after issuing guidance for the second quarter below analyst estimates.

Bulls came in and bought the dip, which caused the stock to rise up and almost completely fill that gap before falling back toward the opening price.

For the first quarter, Nio reported a non-GAAP loss of 13 cents per share, in line with the consensus estimate. The company printed revenues of $1.56 billion, which beat the $1.49-billion estimate.

After dealing with a COVID-19 induced, government-ordered lockdown in April, Nio estimates it will deliver 23,000 to 25,000 vehicles in the second quarter and bring in revenues of between $1.473 billion to $1.591 billion. The revenue estimate comes in far below the analyst estimate of $1.86 billion.

When Nio declined on Thursday, the stock negated the uptrend in which it had been trading since May 12. Although that doesn’t mean the stock will now begin trading in a downtrend, the direction in which Nio is headed has become less clear.

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The Nio Chart: Nio’s most recent higher low in its uptrend was printed on Wednesday at $20.45. On Thursday, Nio dropped to the $18.45 level, which caused the stock to print a lower low. When Nio fell, the stock caught support at the eight-day exponential moving average (EMA), and if Nio can remain trading above the area, it’s possible the uptrend could resume.

• If Nio closes the trading day with an upper wick, it could indicate lower prices will come on Friday. If that happens, Nio will lose support at the eight-day EMA, which will give bearish traders more confidence going forward.
• If Nio is able to close the trading near its high-of-day price, the stock will print a Marubozu candlestick, which could indicate higher prices are in the cards for Friday.
• Nio has a remaining gap above on its chart between $26.41 and $27.22. Gaps on charts fill about 90% of the time, which makes it likely the stock will rise up to fill the empty range in the future. If that happens, it will represent a 42% rally from the current share price.
• Nio has resistance above at $20.25 and $21.77 and support below at $16.75 and $14.31.