Nio Stock Forecast: After 11% gain, NIO opens flat on Wednesday
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- Nio gained 11.2% to close at $9.34 per share on Tuesday.
- NIO stock traded lower in six consecutive sessions before Tuesday's pop.
- Hong Kong and Chinese stock markets both largely flat on Wednesday.
- Politician announces that Chinese economy will reach 5% growth rate in 2023.
UPDATE: Nio (NIO) closed Tuesday's market session at $9.34. On Wednesday, NIO stock opened at $9.34 and, at the time of the writing, the company's shares are trading at $9.34 (+0%). The company led by William Li has found the price of its shares increase by $0 since Tuesday.
Nio witnessed its share price add on 11.2% on Tuesday in a session that saw Wall Street clamber back into the market. The S&P 500 added 1.15% in the session, while the NASDAQ 100 surged 1.75%.
Nio stock news: Turnaround arrives after six-session sell-off
It was high time for a Nio reversal as the EV firm sold off in all six sessions from June 16 to June 26. Tuesday witnessed a surge in nearly all EV stocks.
Major rival Tesla (TSLA) gained 3.8% one day after Goldman Sachs handed it a downgrade, and Chinese rival XPeng (XPEV) closed 8.1% higher. The maker of the long-range Air sedan, Lucid (LCID), jumped 9.9%.
Chinese equities like Nio largely advanced on Premier Li Qiang’s message at the World Economic Forum that the Chinese economy’s growth rate of 4.5% in Q1 would likely reach 5% for the full year. This positive forecast for Chinese GDP then met other positive data coming from the US market.
On Tuesday, the Conference Board reported Consumer Confidence data demonstrating that the percentage of people expecting a recession over the next 12 months is falling. Additionally, the Durable Goods report for May showed a 1.7% expansion rather than the forecasted decline. The Richmond Fed’s Manufacturing Survey also improved from the previous month, and New Home Sales arrived well ahead of the forecast.
The combination of positive US and Chinese news was enough to send the US market higher after a week or more of the equity downtrend. In fact, the NASDAQ Composite marked its best gain in over a month. On Wednesday, however, China and Hong Kong stock markets remained largely unchanged.
On June 21, the Chinese government unveiled $72 billion worth of tax cuts to subsidize its homegrown EV industry. Thus far, the policy has not led to a rally in Chinese EV stocks since the tax cuts do not begin until 2024.
Nio stock forecast
Nio stock broke out of its five-month downtrend on June 12. That same week it met its zenith on June 16 at $10.21 before entering the six-day downtrend. Bulls now need to break above that $10.21 level to ensure the rally continues. This would require a little more than a 9% gain, so it remains a distinct possibility.
The $9.50 level, however, has been a thorn in the side of bulls for most of this year. If Nio stock powers through it and the $10.21 level, then bulls will make a run at the $13 to $14 resistance zone.
NIO daily chart
