Nio stock stalls as chart points to rebound ahead of earnings

Nio's stock price remains in a tight range this month as the recent crash faded, and investors wait for the upcoming financial results.

It was trading at $4.92 on Tuesday, up by 12.50% from its lowest level this year. So, what's next for the Chinese EV giant?

Nio’s business is doing well despite challenges 

Nio stock price has done well in the past few days, moving from a low of $4.38 earlier this month to the current $4.92. It remains significantly lower than last year's high of $8.02.

The last results by the company showed that the business is doing well, a trend that may continue in the coming months.

For example, the most recent report showed that the company delivered 27,182 in January, up by 96.1% from the same period last year. This growth brought its cumulative deliveries to over 1.024 million.

Most of the sales were its premium NIO brand, followed by ONVO and FIREFLY.

The company aims to continue increasing its vehicle deliveries this year, helped by its strong local and international presence.

For example, NIO may benefit from a recent deal between Canada and China that lowered tariffs on Chinese EVs from 100% to 6%. The European Union is also working on making it easier for Chinese companies to enter the market.

Most importantly, Chinese EV companies are doing well in Southeast Asia and Latin American regions, a move that has rattled American automakers like Ford and General Motors.

The challenge, however, is that the Chinese EV industry has become highly competitive with companies like BYD, XPeng, Polestar, Xiaomi, and Li Auto continuing to grow.

On the positive side, there are signs that the company is moving towards profitability.

In a statement, the company said that it is expected to make an adjusted profit from operations of between RMB 700 million ($100 million) and RMB 1.2 billion ($172 million) in the fourth quarter.

Profit from operations excluding share-based compensation expenses. It will be the first time that the company has recorded a profit.

The most recent financial results showed that Nio's revenue jumped to RMB 21.79 billion ($3.06 billion), a 16.7% increase from the same period a year earlier.

Its gross profit rose by 50% to $424 million, while its loss from operations rose to $494 million.

Nio stock price technical analysis

The daily timeframe chart shows that the Nio share price has bounced back in the past few weeks, moving from a low of $4.38 on February 4 to the current $4.92. 

It has risen above the 25-day Exponential Moving Average (EMA), a sign that bulls are gaining some momentum. The stock has moved to the 61.8% Fibonacci Retracement level.

At the same time, the histogram of the Percentage Price Oscillator (PPO) has moved above the zero line since January 21st. The two lines have continued rising and are nearing the zero line.

Similarly, the Relative Strength Index (RSI) has continued rising, moving from a low of 23 in December last year to the current 50.

Therefore, the most likely Nio share price forecast is bullish, with the next key target being the 50%Fibonacci Retracement level at $5.53.

A move above that level will point to more gains, potentially to the key resistance level at $5.78, its highest level on December 30th. 

However, a drop below the key support level at $4.38, its YTD low, will invalidate the bullish outlook.