Nio, Inc (NASDAQ: NIO) was soaring over 16% higher on Tuesday, reversing course from the 15% decline the stock took between Friday and Monday.
On Wednesday, the Shanghai-based electric vehicle manufacturer will hold a Product Launch Event at 8 a.m. Eastern Time.
Nio’s website homepage shows a countdown clock under the heading “New Model Coming Soon.”
Chinese stocks in general were strong on Tuesday despite the S&P 500 showing continued weakness and trading down about 0.4%. The Chinese government has eased off its harsh regulatory crackdown in order to revive the country's economy, which is in bad shape with ongoing COVID-19 lockdowns and restrictions.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The Nio Chart: On Monday, Nio broke from its uptrend when the stock fell below the most recent higher low, which was printed on June 2 at $16.99. Although the uptrend has been negated, Nio hasn’t yet confirmed a new downtrend because the stock hasn’t printed a lower high under the most recent higher high of $20.45 formed on June 8.
- If Nio closes the trading day near its high-of-day price, the stock will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Wednesday. The second most likely scenario would be that Nio prints an inside bar pattern in order to consolidate the sharp surge higher.
- Bearish traders will be watching to see if Nio prints a bearish reversal candlestick, such as a shooting star or doji candlestick, under the most recent higher high, which would confirm a downtrend is in the cards and the spike on Tuesday was a bull trap.
- If the stock can print a higher high over the next few days, the bearish price action on Friday and Monday will prove to have been a bear trap and shorts may be forced to cover remaining positions.
- Nio has resistance above at $20.25 and $21.77 and support below at $16.75 and $14.31.
Photo courtesy of Nio.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga