NIO Inc. American depositary shares, each representing one Class A Reportis, were sold down in the trading session of June 9 after the electric-vehicle company reported earnings before the opening.
Sowohl for electric vehicle stocks as well as for Chinese stocks, this has been a challenging year.
Alibaba (BABA) - Get Alibaba Group Holding Limited American Depositary Shares each representing eight Reports, JD.com (JD) - Get JD.com Inc. Report, Li Auto (LI) - Get Li Auto Inc. Reportand others have had a brutal run. These stocks have been driven off a cliff, as if the selloff in tech and growth sectors wasn''t enough.
Nio has been a big fan of late, although they have had a good start.
Analysts say the automaker beat expectations for both profit and revenue, boosting the latter by 24% year over year. However, expectations of $1.59 billion in earnings for the next quarter remained insufficient to $1.79 billion.
Even as Tesla (TSLA) reports modestly on the day following its May deliveries in China, this is likely the catalyst for today''s decline.
Is Nio a stock to run from or a buy-the-dip option?
Trading Nio Stock
Nio stock''s daily chart.
TrendSpider.com has created a chart.
Given the current market conditions, I''m a bit surprised that a buy-the-dip approach is even feasible.
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Nio''s stock shrank in early May around $13. However, it reintroduced quickly reversed from there and began an impressive uptrend, climbing 75% from the previous months low to this months high.
Nio''s stock is now recovering from the earnings report due to the pullback. Amid the pullback, the shares are shifting from the 10-day moving average active support.
Bears remain in control as long as it can hold Thursdays low at $18.45 and the 10-day, but they will still need to increase Nio''s stock through the 21-week moving average, with $20 and this week''s highest at $20.45 in play.
Nio breaks the 61.8% retracement of the stock trading range since it fell on February 10.
Despite its continued momentum, the bulls will look at the second-quarter high near $24, followed by the gap-fill level at $27.22.
On the downside, a break from the 10-day moving average might result in increased selling pressure. Specifically, the 50-day moving average and uptrend support will be highlighted.
Below, a $15 to $16 transaction is in play.
Because it has so far fallen, it''s tough to be a confident buyer in something like Nio stock.
As long as the bull market continues to follow, then thats where our bias will fall until we''ve found ourselves wrong, which would happen if active support fails.