Nio (NYSE: NIO) continues to grow momentum. The electric vehicle manufacturer has the “it” factor at the moment, and the growth of the stock shows it. The Electric vehicle (EV) segment has had a little bit of mixture this year, but Nio has been consistent.
The China-based automaker has made authentic moves to get investors riled up. After Tesla’s (NASDAQ: TSLA) phenomenon move that blew it to a higher position, investors will have a taste of Nio’s potentials.
There have been some setbacks in the Electric Vehicle companies. Workhorse (NASDAQ: WKHS) has had a little bit of volatility after they went public using the spatial autocorrelation (SPAC) method. The tales surrounding Nikola (NASDAQ: NKLA) hasn’t been a good one of late, with short report throwing investor off guard.
Tesla and Nio seem to be in a different wave. Their companies and stock prices have momentum. Although in the past last month’s Tesla’s stocks have been wavering a bit, but don’t forget that its market cap at some point increased to $475.
We have said enough about the industry; now let’s get to know why Nio is special.
TRADING ON NIO STOCK
The last checked chart shows just how solid and well arranged the rally has been. The shares exploded off March and April lows, it tripled in June when it got to a new high.
Even with all that, Nio still blasted through $10, moving from $8 to $ 16 in just a few open market periods. The shares have had a row of coalitions and breakouts since. On October 14, 2020, the stock had its latest break out.
Nio kept on trading around the 161.8% area (for the whole preliminary range going way back to its IPO in 2018). Nio was also trying to strive for the $22.50 extension. But, it was obvious that the traders were in command, just waiting for the right time to strike once the stock moves higher.
You are probably wondering how we knew that right. Take a look at how compact the spectrum was in the last previous trading periods. The ranges not only got more compact, but they also had higher lows as the 10-day moving average kept on pushing Nio upwards.
With Nio leaving in support and resistance level, bulls will probably be inching for $25 on the upside, accompanied by the two-times spectrum area at $26.41. If the stock increases more than that, we’ll be having $30. Unfortunately, the $21.50 to $22.50 category needs to be sustained as assistance for the bullish move to remain unchanged. If the stock closes below these marks it would result in more selling pressure.
THE VALUE OF NIO STOCK
The reason why this stock is one of the hottest stocks in the market right now with so much influx of buyers is that the stock is growing.
The novel Coronavirus has affected so many companies negatively. A large scale of industries only hoped to have a positive increase this year, let alone make profits. With just a few companies being able to still expand in this period, growth inclined investors have no other choice than to pick from the available small number of companies. Those with a great moment like Nio belong to an even smaller group.
When stocks pummel down like this it forms a funnel look, with lesser stocks left as we get closer to the nozzle. These kinds of stocks command higher premiums, because of the increase in demand for them. The favorability of the stocks technical is also a helpful criterion as shown above.
Nio’s stock was elevated on October 14, 2020, JP Morgan to $40 price target. That’s an increase of 66% from its current level. The high target only explains the thoughts of investors at this moment.
C Brainerd expects Nio’s revenue to increase this year by 97%, accompanied by 75% growth in its 2021 financial year. Nio still records bottom-line losses. But these failures are anticipated to reduce by half this year.
Nio supplied over 12,000 cars during the third quarter and was up 154.3% year to year. Collective with the revenue growth of US$526.4 million in the second quarter of 2020, this shows an increase of 146.5% from the Q2 of 2019 and an increase of 171.1% from the Q1 of 2020. This is the type of market trend that growth-oriented investors look out for.
At the beginning of 2020, Nio had a total asset of 14.6 billion Chinese yuan and current assets of 4.9 billion yuan. It’s cash and equivalents was 974 million yuan. By the end of June Nio possessed 23.1 billion yuan of total assets and 15.1 billion yuan of current assets with over 10 billion yuan of cash and equivalents
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