Nio stock price to enter beast mode as rare golden cross forms

The Nio stock price has staged a strong comeback this year, matching our recent forecasts. It jumped to a high of $5.95 in the premarket, its highest point since October last year and 95% from its lowest point this year. 

Why Nio stock price is soaring

Nio share price has staged a strong comeback, helped by the recent launch of its brand new vehicle as competition in the country soars. It launched the ES8 SUV, which will start selling at 308,800 yuan or $43,000. 

This price will be that of its subscription plan, which enables users to pay a monthly fee and lets them swap batteries. Nio sees its battery swapping technology as an added advantage as it eliminates range anxiety in the country. In a statement, a MorningStar analyst said:

Nio earnings ahead

Nio has made other headlines recently, as we reported here. The most important aspect is that it is expanding its offerings to other countries in Asia and Europe. Its goal is to capture these markets as the Chinese gets highly saturated. 

The next important catalyst for the Nio stock price is its upcoming earnings on September 2. There are chances that these results will be strong based on the recently released delivery data. 

The numbers showed that the company delivered 72,056 vehicles in Q2, a 25.6% increase from the same period last year. It has now delivered over 785,715 vehicles since its inception. 

Wall Street analysts expect the results to show that the revenue rose by 13% in Q2 to CNY 19.74 billion. Its guidance for the third quarter is expected to be CNY 24.6 billion, up by 32%, while the annual figure will be CNY 89 billion. 

Nio’s main challenge has been that it loses a lot of money and has failed to turn a profit. This, in turn, has pushed the management to raise billions of dollars, diluting existing investors.

Analysts expect the annual loss per share to be 8 yuan, followed by 6 yuan next year. Its profitability will come earliest in 2028.

Nio stock price technical analysis

The daily chart shows that the Nio share price has rebounded in the past few months, as we predicted here. This rebound started after the stock bottomed at $3. 

It has formed an inverse head-and-shoulders pattern, whose head is at $3 and shoulders at $4. A closer look shows that it has now surged and crossed the neckline at $5.48, confirming the bullish momentum. 

Most importantly, the stock has formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. 

Therefore, the stock will likely continue soaring, with the next target price being at $7.67, its highest level in October last year.