The Chinese automaker is firmly back in the race for EV domination. This could be the start of good things to come for the NIO stock price.
NIO (NIO:NYSE) finished the day at $47.36 adding $2.34 (+5.205).
In last week’s report on NIO,I discussed the Tesla rival’s recent turnaround.
Just a month ago, after reporting dismal Q1 earnings, NIO was languishing just above $30. The 13th of May low of $30.71 was the cheapest the stock had traded since October 2020 and a discount of more than 50% from the $66.99 all-time high set in January.
The $0.48 loss per share for the 3 months ending March was much wider than the $-0.08c per share the market expected.
Fast forward a month and things are looking brighter all-round.
So far so good.
However, I added:
Low Volume Suggests Rally May Be Stalling.
I could not have been more wrong. Following the article’s publication, the NIO stock price has rallied 11% and may have more to go.
On the 11th of June, the daily chart shows that NIO closed above the 100-day moving average but stopped short at the $46.16 resistance of the March 11th high.
Three days later, the price was once again testing the 100 DMA, which was now a support level. Crucially, NIO sprang higher from the average and subsequently finished yesterday’s session above $46.16.
This is certainly a positive development, and as long as the price remains above these key metrics, it should continue to do well.
Therefore bulls may wish to open long positions around the current level, with a price objective of $65.00.
To limit potential losses, buyers should place a stop below the 100-day moving average at $43.35. This trade has an optimal payout of 4 times risk and, given the current trajectory, presents an interesting proposition.
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