Stock of the Day (4/2/21)- NIO

Overview

Today we look at the stock of the day NIO, the manufacturer of smart and connected electric vehicles. NIO has been in quite the spotlight over the last few months in competition with Tesla. With more talks of countries and customers adopting a cleaner lifestyle and looking at future sustainability, these vehicles are what anyone thinks of when they think of the future.

NIO had a very quick and atmospheric rise between June 2020 to January 2021, moving from less than $5 in June and hitting a high of $66.99 on January 15, 2021. The market has been under a lot of pressure since January and we’ve seen a lot of stocks that were leading the market in the past get hit very hard, including Tesla itself.

Weekly Chart Notes

This stock of the day is now siting at $39.66, just 59% of its 52-week high. Taking a look at the weekly chart of NIO, support has been reached around $35 for 4 of the last 5 weeks. The stock has reached lower than this point through the week but has been bouncing off of it. Below is the weekly chart:

NIO Weekly Chart 4-2-2021

Daily Chart Notes

If we take a look at the daily chart, we also see that NIO has bounced off this $35 point quite a few times over the past few weeks. If you take a look at the green line below the candlesticks in the daily chart, you will notice the 200-day moving average line is getting closer to these lows. NIO may find some good support along this 200-day moving average line as it makes its way across.

NIO daily Chart 4-2-2021

Insights

If this $35 resistance line holds up, the current price of $39.66 is approximately 13% above this line. It’s slim pickings out there with current market conditions, so there are not many cup and handles forming or other traditional patterns. With the future pointing to electric vehicles and NIO being one of the up and comers, this price point may offer a good value pick.

I plan on picking up a small amount of NIO as a value pick for a longer-term play, rather than a usual momentum pick for a stock bursting out of a specific buy point.

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