The NIO stock price tracked its peers lower in a disastrous day of trading for Electric Vehicle makers. The 180-degree turnaround now leaves Nio vulnerable.
Chinese EV maker Nio Inc (NYSE: NIO) slumped $4.25 lower to $46.04. The one day 8.45% loss marked its worst performance since February.
Yesterday witnessed a deluge of selling across the nascent electric vehicle sector. What started with Lordstown Motors (NASDAQ: RIDE) and Workhorse Group (NASDAQ: WKHS) has seeped into Telsa and now NIO.
Although Nio Inc is a different prospect altogether to the struggling Lordstown, investors have been rattled by concerns the sector is running a little hot.
NIO Inc has been lower in 3 out of the last 4 sessions, culminating in a 16% decline from the July 1st $55.13 high. Furthermore, technical indicators have reversed and now point lower.
Looking at the daily price chart, we can see the Nio stock price has fallen out of a 2-month uptrend. The line drawn from the 2021 low of $30.71 gave way as Nio broke down through $48.20.
Additionally, the 100-day moving average at $41.98 has crossed below the 200 at $42.29. This signals the stock is now in a bearish trend.
The presence of the 50 DMA at $41.30 suggests this band of tightly bunched averages will provide a robust area of support.
The Relative Strength Indicator (RSI) has also turned south from the overbought 74.40 reading at the end of last month. The momentum indicator is now trending lower and shows 50.4.
Considering the broad selling across the EV space, the path of least resistance appears to be lower for NIO. And an obvious target is the $41.30-$42.30 range.
The short-term bearish outlook remains valid until NIO recovers its uptrend at $48.20
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