Nio stock rose on Tuesday, gaining 2.4 percent within the first hour of the market opening to trade at $4.14. The Chinese EV maker’s outlook has improved despite registering a slight decline in its August sales numbers, when it sold 20,176 vehicles, down from July’s 20,498. This is as a result of the availability of its cheaper model, the Onvo L60, in stores starting September.
Nio (NYSE: NIO)will announce its second quarter earnings on Thursday, in which it is expected to have narrowed its losses to around $705 million from last year’s corresponding quarterly losses of $837 million. That will likely be down to increased margins and reduced loss per unit as a result of higher sales numbers in 2024.
However, the biggest driver for Nio stock price will likely be the news of the commencement of the sale of its Onvo L60 Model, which started selling in 105 stores across China’s 55 cities this week. With a price tag of about $30,500, the model is Nio’s cheapest yet, and is expected to give it muscle against competitors, including Tesla’s Model Y. Furthermore, the company revealed recently that an even cheaper model, the Firefly, will hit stores in early 2025.
Also, Nio has trained its eyes on market expansion outside China, with a move to the United Arab Emirates in the pipeline, and set to be announced later this year. These developments signal an unprecedented aggressiveness by the erstwhile loss-making company, and could spring it to profit-making in the mid-term.
The momentum on Nio stock signals an upward trajectory as seen on the 2-hour chart. The price is significantly above the middle Bollinger Band, and is making moves on the upper band, signifying a stronger buying appetite.
Meanwhile, the Money Flow Index (MFI) on the 30-minute mark is at 93, pointing to a strong positive money flow into the stock. Therefore, we will likely see Nio stock price extend its gains above the 4.10 pivot mark. That could result in the first resistance mark being at the 4.20 mark, but extended bullish control will clear that barrier and test 4.28.
Conversely, moving below 4.10 will favour the sellers to take control. In that case, look for the first support around the 4.02 level. However, if the sellers extend their control, they could strengthen the downside momentum to go below that level and render the upside narrative invalid. Furthermore, that could extend losses to test 3.94.
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