Nio stock price staged a strong comeback, as we predicted a few months ago. It jumped to a high of $5.12, its highest point since March 19. It has soared by about 70% from its lowest point this year, giving it a market capitalization of over $10 billion. This article explores what to expect and whether it is a good buy today.

Nio stock price technical analysis

The daily chart shows that the Nio share price has staged a strong bullish trend in the past few months. It moved from a low of $3 in April to a high of $3.15, a 70% surge. This surge aligns with our recent forecasts, as illustrated here, here, and here. 

The stock has moved above the 38.2% Fibonacci Retracement level at $4.80. It has also surpassed the key resistance level at $4.43, the highest swing in May this year. That level was notable because it was the neckline of the double-bottom point at $3.35. A double bottom is one of the most bullish reversal patterns in technical analysis.

Nio has moved above the 50-day and 200-day weighted moving averages, and the spread between the two is narrowing. A golden cross is one of the most bullish patterns in technical analysis.

Top oscillators, like the Relative Strength Index (RSI) and the MACD have continued rising. Therefore, the most likely scenario is where the stock continues rising as bulls target the 61.8% Fibonacci Retracement level at $5.90. This target is about 16% above the current level. 

Nio stock chart | Source: TradingView

Why Nio share price is surging

There are four main reasons why the Nio stock price is in a strong bull run today. First, the rally is in line with the ongoing meme stock jump that has affected highly-shorted companies like Tilray, Opendoor, and GoPro. Nio has a short interest of almost 9%. 

Second, the Nio stock price has jumped due to its strong delivery figures, which are being helped by its mass market strategy. The most recent figures showed that the company delivered 24,925 vehicles in June, a 17.5% increase from the previous month. 

Nio delivered 72,056 vehicles in the second quarter, up by 25.6% from the same period last year. This growth was primarily driven by its flagship brand and its mass-market ONVO and Firefly products. In contrast, other companies like Tesla have continued to experience weak sales growth this year.

Third, Nio stock price has jumped because of the ongoing hype surrounding L90 SUV, which targets the family-oriented mass market. The vehicle has a top speed of 200 km/h and a range of about 570 kilometers.

Data shows that the vehicle has had between 30,000 and 35,000 pre-orders, with deliveries starting on August 1. It aims to sell about 25,000 ONVO vehicles per quarter starting from Q4 of this year. 

Finally, analysts anticipate that Nio’s business will continue growing this year. The average revenue estimate is 90 billion yuan, up by 37% from a year earlier, followed by 115 billion yuan next year. It will also continue to narrow its loss, with the average loss per share being 8.14 yuan this year, down from 9.92 yuan last year. It will then narrow it to 6.74 yuan in 2026.

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