- Li Auto (LI) stock jumps 10% in two days to close the week.
- Li Auto announced orders for its Li9 SUV are strong.
- Chinese stocks were also boosted by hopes for a delisting deal.
Li Auto (Li) impressively closed last week as it added to Thursday's 6% gain with another 4% on Friday. That has meant LI stock is now up 22% on the week and a whopping 81% over the last month. LI Auto stock has moved from $18.83 in early May to close Friday at $40.79.
LI Auto Stock News: Li L9 SUV orders said to be strong
LI said on Friday that orders for its new SUV, the L9, have surpassed 30,000 within three days of orders being opened for reservations.
From the press release: " orders for Li L9, its flagship smart SUV, have exceeded 30,000 in 72 hours since the vehicle was available for reservation, demonstrating the outstanding product appeal of the vehicle for family users."
The news was enough to send shares in Li Auto (LI) higher on Friday to add to an impressive run for the stock as detailed above. Chinese tech stocks had been strongly sold off this year as many were listed by the SEC for potential delisting due to problems with the Holding Foreign Companies Accountable Act (HFCAA). The SEC had issues in particular with audit access to Chinese tech firms and listed many retail favorites for potential delisting. Recent conciliatory tones from Bejing led investors to upgrade their odds that delistings could be avoided and saw a surge in Chinese tech stocks.
This is most obvious from the KWEB China Internet ETF. The chart below is up over 30% in the past month. KWEB includes many SEC stocks flagged for potential delisting. Chinese stocks have also been boosted by loose monetary policy and proposed economic stimulus measures announced by Chinese authorities.
An article in last Thursday's South China Morning Post, "China considers extending EV tax exemption to put industry back on track after Covid-19 lockdown", also naturally helped Chinese EV names LI, NIO and others.
KWEB chart, daily
LI Auto stock forecast
The strong performance has seen LI stock retrace nearly back to pandemic highs, one of the few meme stocks to do so. That naturally makes us wary, and we also notice LI is showing an overbought signal on the Relative Strength Index (RSI) and Money Flow Index (MFI).
LI chart, daily
NIO by contrast remains miles away from its pandemic highs
NIO chart, weekly
NIO seems to have caught the meme frenzy a lot more than LiAuto, so naturally NIO had further to fall.
Weekly NIO (orange line) versus LI Auto chart
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