Nio Inc. (NYSE:NIO) shares are trading higher Wednesday as they are seeing a strong green day after about a week of bearish movement. The stock has broken support in a long term pattern and has been trending lower since the break. The stock could see a reversal, but will need to see more bullish movement first.
Nio was up 12.52% at $20.22 at time of publication.
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Nio Daily Chart Analysis
- The stock fell below support in a pennant pattern and has been trending lower since. NIO is seeing a strong rally today, which shows buyers have moved into the market. If buyers continue to pile into the stock, it may begin to see a reversal.
- The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
- The Relative Strength Index (RSI) saw a jump higher today and sits at 41 on the indicator. This spike higher represents the buyers that moved into the market today. If more buyers continue to move into the market, the momentum could continue. If the RSI stays where it currently sits, the stock will likely continue to trend lower.
What’s Next For Nio?
Nio has been on a steady downward trend since the break below the support line of the pennant. The stock has seen strong volume below the support level, showing that the downward trend is strong. The stock doesn't look like it is ready to turn around just yet, it will need to show more signs of a reversal first.
Bullish traders are looking to see higher lows form for a time and see the RSI cross back above the middle line.
Bearish traders are in control of the stock in its current trend, and are looking to see the RSI hold below the middle and for the NIO to continue to form lower highs.
