Nio, Inc (NYSE: NIO) was trading over 5% higher on Monday, driven in part by overall market momentum as the S&P 500 Index was up by about 1%.
The Shanghai-based electric vehicle maker also announced its operations have returned to pre-COVID-19 levels after continued lockdowns in China forced Nio to halt production earlier this year.
Nio will also roll out its fifth model, the ES7, after receiving clearance from the Chinese government, according to a recent report. The company’s latest SUV model was originally scheduled to launch in April.
Adding a fifth model to its lineup is likely to help Nio recover more quickly from weak production numbers in 2021 and could also help the stock gain traction, if the market cooperates. The stock has lots of room to head higher after plunging 82% between the all-time high of $66.99 printed on Jan. 11, 2021 to a May 12 52-week low of $11.67.
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The Nio Chart: On Monday, Nio was breaking up bullishly from an inside bar pattern that was created on Thursday and Friday. A break up from the formation was the most likely scenario because Nio was trading higher before forming the pattern.
- Nio is also trading in a confirmed and consistent uptrend, with the most recent higher high printed on June 1 and $18.93 and the most recent higher low formed at the $16.99 level on Thursday. If Nio is able to surpass the most recent higher high on Monday, a new high will print, which will further confirm the uptrend is intact.
- Bullish traders will want to see a new high print and then watch for a higher low to form over the coming days, which could give traders who aren’t already in a position a solid entry point. Bearish traders want to see Monday’s price action create a bull trap and for big bearish volume to come in and break the stock down from Thursday’s mother bar, which would cause the stock to lose the eight-day exponential moving average as support.
- Nio has a gap above between $26.41 and $27.22 that was left behind on Jan. 24. Gaps on charts fill about 90% of the time, which make it likely the stock will rise up to fill the empty trading range in the future. If Nio soars up to fill the gap, it would represent a 50% increase from Friday's closing price.
- Nio has resistance above at $20.25 and $21.77 and support below at $16.75 and $14.31.
See Also: How to Read Candlestick Charts for Beginners
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