Here’s why Nio stock may jump 20% to $ in this bull run

Nio stock price is firing on all cylinders as other popular companies like Tesla and Rivian stumble. It jumped to a high of $6.50 on Monday, its highest point since November 11 last year and 51% above its lowest point in February  

New vehicle launch and growth momentum fuel growth 

Nio stock price has been in a strong uptrend this year after the company published its vehicle deliveries data and financial results, which showed that it has become a profitable company.

The most recent results showed that Nio’s deliveries soared in the first quarter, even as China’s EV subsidies ended. It delivered 35,486 vehicles in March, bringing the total quarterly delivery figure to 83,465. Its deliveries are now soaring by double digits YoY, making it one of the fastest-growing companies in China.

In contrast, other Chinese EV companies are no longer growing as they did in the past. XPeng’s deliveries dropped by 32% YoY, while Li Auto’s sales rose by 2.4%. BYD’s sales crashed by 30% in the same period. 

The management believes that the growth trajectory has more room to go. In a statement, William Li, the Chief Executive Officer (CEO), said that the company had now entered the third stage of development and that the trajectory will continue. 

A good example of this is ES8, which hit 16,225 deliveries in March, making it one of the fastest-growing companies in the industry. Its sales count are much higher than other comparable vehicles like Zeekr 9x, Aito, and even its Onvo brand.

The company hopes that the recently launched ES9 will continue this momentum. It is starting at 528,000 yuan, lower by 31% than the ET9 sedan.

The soaring delivery numbers have also coincided with the robust financial results, which the company released in March. Its total revenue rose to $4.9 billion in the previous quarter, with the closely-watched gross profit rising to $868 million, up by 163% YoY.

Most notably, Nio made its first net profit, which came in at $40 million. The company expects the profitability momentum to continue in the coming quarters.

Nio stock price technical analysis

Nio stock chart |Source: TradingView 

The daily timeframe chart shows that the Nio share price has soared in the past few months. It jumped from a low of $4.25 in February this year to $6.7 today.

A closer look shows that the stock is slowly forming a cup-and-handle pattern whose upper side is the last year's high of $8.01. A C&H is one of the most common bullish continuation signs in technical analysis.

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

Therefore, the combination of a golden cross and a cup and handle pattern points to more gains in the coming weeks, possibly to the upper side at $8.01, which is about 22% above the current level.