Nio stock price forecast: rating upgrade, target at $16.20

Nio (NYSE: NIO) stock price has pulled back in the past few days amid escalating tensions between the US and China. The shares dipped to a low of $12.85 on Friday, a few points below this month’s high of $16.10. They remain about 80% above the lowest level this year.

Tesla cuts prices again

Nio share price has retreated recently as concerns about the rising tensions between the US and China continued. The most recent news was that the US barred American investors from investing in China’s high-tech companies in areas like quantum computing and AI.

It is unclear how China will respond to these restrictions and how they will impact companies like Nio, Xpeng, and Li Auto. Analysts believe that companies like Nio will not be impacted since they generate their sales in China. Nio also recently received a $1 billion investment by Abu Dhabi.

Nio stock price is also reacting to the happenings in the electric vehicle industry. For example, Tesla announced that it was slashing prices of Model Y in China. It cut the starting price of these vehicles by about CNY 14k in a bid to boost its market share.

These moves mean that EV industry in China is slowing as the economy recoils. In its monthly report, Nio said that it delivered 20,462 vehicles in July, a 103.6% YoY increase. Sales also jumped by 91% from the previous month. The company hopes to deliver 250k vehicles this year even after having an underwhelming first half.

Nio stock will also react to the upcoming data dump from China, which I covered here. The report is expected to show that the economic slump continued in July.

Nio stock price forecast

The daily chart shows that the Nio share price has pulled back in the past few days. Despite this drawdown, the stock remains above the 200-day and 50-day moving averages. The two are close to forming a golden cross pattern, when the two moving averages crossover.

Nio stock has retested the important support level at $13.16, the highest swing on January 24th. This is known as a break and retest pattern, which is usually a bullish sign.

Therefore, I believe that the shares will likely resume the bullish trend in the coming days. If this happens, the next level to watch will be the YTD high of $16.20.