- NIO stock finally catches a bid as it rallies 17% on Monday.
- NIO delivery data on Tuesday is strong and should help the share slide stabilize.
- NIO got hammered in the new rotation away from growth stocks and is down 23% year to date.
Finally, some respite for beleaguered shareholders in NIO yesterday, of which the author is one. My entry point is also substantially higher like many of you, but hopefully this may be a sign of impending change. The stock has suffered from the rotation away from high growth names this year.
NIO has also suffered the Chinese effect, and basically Chinese tech has been the most unloved space for the last three months. This is due to the regulatory crackdown that started back with Alibaba's (BABA) spin-off of ANT Group. This crackdown then continued with the DIDI delisting. Ever since Chinese tech names have been hammered. NIO also suffered as Tesla got hit from a combination of high growth and supply woes. So it has been a tough time for holders.
NIO stock news
NIO released images of its new ET5 car rolling off assembly lines, which were picked up yesterday by mainstream media. This generated interest at just the right time given the bounce in the NASDAQ and general risk appetites returning. Meme stocks rallied hard on Monday as a result.
This morning further news from NIO arrived as it released its January delivery numbers. The number of deliveries fell from a month earlier to 9,652 vehicles. It is an increase of over 30% from January last year, but YoY comparisons are not so important here and monthly is the more watched metric. In that sense, investors will be disappointed with this slowdown from December. Li Auto (LI) also reported slow January sales numbers as the Lunar New Year in China is supposedly part of the reason. That also appears to have affected XPeng (XPEV) as it too reported lower numbers in January from December.
NIO stock forecast
Closing the gap to $27.34 will end the current bearish run and give NIO some chance to stabilize. Also note the Relative Strength Index (RSI) downtrend, so this will need to be watched for confirmation also. The RSI already signaled a bearish divergence with it failing to make a lower low despite the new lows in the NIO stock price. First resistance at $24.54 from the 9-day moving average can close the gap to $27.34. Failure will likely see a move to $14, the point of control.
NIO chart, daily
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