On Sunday evening, Benzinga asked its Twitter followerswhat they’re buying at the open on Monday. From the replies Benzinga selected one ticker for technical analysis.
@TTTIMOTHYYY47, @george_grande and @540856 are buying Nio, Inc (NYSE:NIO).
Nio opened Monday’s trading session about 4% higher, leaving a small gap, which the stock immediately fell down to after shorter-term traders began to take off profits. When the stock fell lower, buyers came in, and within the first 5 minutes of trading 3 million shares had already exchanged hands.
UBS analyst Paul Gong upgraded the Shanghai, China-based EV manufacturer on Monday from Neutral to Buy and announced a $32 price target.
If Nio were to reach the level, it implies a 45.85% move to the upside from Friday’s closing price.
The upgrade comes after Nio reported a rebound in March delivery numbers, which increased 61.4% over February.
The analyst said Nio can accelerate its sales this year due to three new models it will launch, and said Nio is developing better brand recognition, according to a UBS Evidence Lab electric vehicle consumer survey,
Nio’s shares also received a boost in the premarket after the China Securities Regulatory Commission revised draft rules to allow U.S. regulators to conduct on-site audit inspections of its home-based companies, which lowers the risk that Chinese securities could be delisted from U.S. exchanges.
See Also: Why Tesla Rivals Nio, Xpeng And Li Auto Are Really Shooting Up In Hong Kong Today
The Nio Chart: Nio plunged 80% after reaching a Jan. 11, 2021 all-time high of $66.99 to find a bottom at the $13.01 level on March 15, where the stock reversed to the upside.
Nio has now formed into an uptrend pattern on the daily chart, with the most recent lower high printed on March 25 and the $19.35 mark and the most recent higher high created at $23.86 on March 30.
The stock has been trading on higher-than-average volume, which indicates a high level of trader and investor interest. On Friday, 110.16 million Nio shares exchanged hands, compared to the 10-day average of 90.57 million.
Nio has a gap above on its chart between $26.41 and $27.22. Gaps on charts fill about 90% of the time, which makes it likely Nio will trade up to fill the empty range in the future.
Nio is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish, and on Friday Nio tested the area as support and held above it.
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- Bulls want to see big bullish volume come in and push Nio up to make a higher high, which will push the stock up above a resistance level at $23.98 and put Nio within distance of closing the upper gap. Above the level, there is further resistance at $27.39 and $30.71.
- Bears want to see big bearish volume come in and drop Nio down below the eight-day and 21-day EMAs, which will cause the stock to form a lower low and negate the uptrend. Nio has support below at $21.77 and $20.55.
