NIO Stock Price Surges by 14%
On 23 August, while analysing the chart of Chinese automaker NIO, we noted that:
For months, the price has been forming a downward channel (shown in red), driven by the companys inability to turn a profit, with the $4.25 level acting as resistance.
Investors may hold out for positive shifts in the fundamentals, as for the first time in the company's history, monthly vehicle deliveries have remained above 20,000.
Indeed, the companys second-quarter report released yesterday brought pleasant surprises, including reduced losses, a 98.9% year-on-year revenue increase, and improved gross profit margins.
Experts are revising their forecasts, with Deutsche Bank analysts raising their target price for NIO shares, anticipating that the company will sell over 60,000 vehicles in the third quarter.
The market reacted with a sharp price increase NIO stock surged by 14%.
From a technical analysis perspective of the NIO stock chart:
The $3.70 level prevented the price from falling to new year-to-date lows;
The upper line of the downward channel was broken now the bulls need to consolidate above this channel to render it irrelevant;
On the back of the positive report, the price broke through the $4.25 resistance level, which is now expected to act as support.
Its possible that NIOs stock price could follow a bullish trajectory, making the upward channel (shown in blue) increasingly relevant.
Read more: https://fxopen.com/blog/en/oa-nio-stock-price-surges-by-14/
Text source: Forex Trading Blog
