Nio (NYSE: NIO) stock price is consolidating around the downward trendline I mentioned in my previous analysis. The stock price has been trading around the trendline for the past 12 days. The stock for the Chinese EV manufacturer is priced at $10.44, down 2.13% in pre-market trading on Thursday.
The markets saw a strong sell-off on Wednesday after slower-than-expected service sector growth in China during August. The country reported a declined PMI from 54.1 in July to 51.8 in August. As a result, the Nasdaq100 lost 149 points on Wednesday, while the S&P500 saw a 0.7% decline.
On the 29th of August, Nio reported a net loss of RMB5.79 billion. The total revenue for the quarter was RMB8.77, below analysts’ expectations of RMB9.14 billion. However, the company hopes to report better Q3 performance by expecting total revenue of somewhere between RMB18.90 billion and RMB19.52 billion.
In the wake of Nio’s Q2 results, Bofa Securities dropped their NIO stock price target from $16.2 to $15 while keeping their “buy” rating for the stock. However, JPMorgan maintained its “Neutral” rating for the Chinese EV producer and upgraded the price target to $10.5 from $9.
The following chart for NYSE: NIO shows the price hovering around the downward trendline. The price is also consolidating right at the middle of the $8-$14 long-term trading range. This is a very critical zone and I expect a major move in the coming days.
The Nio price forecast is likely to turn bearish if the price breaks below $10.5. In this case, I expect a 22% correction towards the range low of 8.3. On the other hand, if the stock experiences a strong bounce, a rally toward the $14 range high will be on the cards.
I’ll keep posting my updated NIO analysis and my personal trade setups on Twitter, where you are welcome to follow me.
This post was last modified on Sep 07, 2023, 11:02 BST 11:02