NIO shares have been hammered lately, which is no surprise given the turmoil we’ve seen in growth stocks.
While the stock is off its lows, it’s still down almost 50% from its highs in January. Tesla topped out a few weeks after NIO but has struggled too, with shares currently down 34% from the highs.
With that being said, let’s not forget that NIO also rallied almost 5,000% from its October 2019 low to its high in January 2021. So it’s not surprising to see a ~50% correction off the highs.
That's particularly as other EV and growth stocks struggle. The question to ask is when will the pain end.
NIO stock rode the 10-week moving average to new highs for quite some time. While the correction down to this moving average looked incredibly healthy in February, the bounce was short-lived.
We saw an initial rally off the 10-week, but shares quickly lost this measure as support in the following week.
It has been resistance since, while NIO also failed to hold the 21-week moving average as support. Now down into the 50-week moving average, we’re starting to see the stock stabilize.
The stock is at an interesting juncture now. We had a tight inside week last week as NIO stock now tries to go weekly-up over $34.78.
That would eventually put the 10-week moving average in play, but not before the 10-month moving average is in play. This measure had been support all through March and April. However, Nio broke below the 10-month a few weeks ago and has struggled to reclaim it.
If we get a weekly-up rotation, see if Nio can reclaim the 10-month. Above it puts the 10-week moving average back in play.
Since we’re closing in on the end of the month in a few days, the May high at $41.45 and the May low at $30.71 will also be key over the next few weeks.
In June, see if the stock rotates through either level. A monthly-up rotation potentially puts the 21-week moving average and $50 in play. A monthly-down rotation could put the 21-month moving average in play.