Hello fellow traders. The past couple of weeks have been very volatile but I don't think we are heading to a bear market. That said, a lot of growths stocks were beaten down pretty hard already. EV stocks are taking a hard hit but if we look at the broader picture I think this is a good opportunity to start a position or add to if you are already in. One of such cases is NIO.
BEARISH SHORT TERM OUTLOOK
Nio's price fell pretty hard (about 11%) after yesterday's earnings and broke below the 100ema for the third time in the timespan of 6 days. During trading hours we came very close to the 0 fib level, which served as support on last week's selloff. Additionally, the 14ema crossed the 21ema bearish, which hasn't happened since the March 2020 crash. It is currently crossing the 50ema.
WHY THIS MAY BE A GOOD ENTRY
In addition to last week, that fib level has been tested as support multiple times the past few months so we can use it as a pretty reliable anchor point to start a trade. The RSI is close to oversold and is showing hidden bullish divergence with price. If you are a long term investor, you may look at current price as a 35% "discount" from ATH. I know it is counter intuitive to buy something that is losing value but if you could buy a pair of shoes with 35% I bet you would be happy. The only caveat with stocks is that you need to be confident the company has a bright future, which is the case of NIO in my opinion. The average price target is $68.26 (www.tipranks.com/stocks/nio/forecast) and investors are very positive on Nio's 2021 Q1 results (despite worse than estimated 2020 Q4 earnings).
HOW TO TRADE
Long term investors: just keep dollar cost averaging. I like to buy more on dips and pullbacks than rallies but that is my personal preference. You can keep buying the same amount as before.
Traders: you can enter now and place a stop loss below the 0 fib level on the daily. If your stop is triggered you can always buy back in if the price bounces back above that fib level. (This is also true for long term investors who want to be more conservative).
Safe trades and good luck!
===If you get anything out of this TA, please hit the like button and/or follow for updates and new publications.===
***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
BEARISH SHORT TERM OUTLOOK
Nio's price fell pretty hard (about 11%) after yesterday's earnings and broke below the 100ema for the third time in the timespan of 6 days. During trading hours we came very close to the 0 fib level, which served as support on last week's selloff. Additionally, the 14ema crossed the 21ema bearish, which hasn't happened since the March 2020 crash. It is currently crossing the 50ema.
WHY THIS MAY BE A GOOD ENTRY
In addition to last week, that fib level has been tested as support multiple times the past few months so we can use it as a pretty reliable anchor point to start a trade. The RSI is close to oversold and is showing hidden bullish divergence with price. If you are a long term investor, you may look at current price as a 35% "discount" from ATH. I know it is counter intuitive to buy something that is losing value but if you could buy a pair of shoes with 35% I bet you would be happy. The only caveat with stocks is that you need to be confident the company has a bright future, which is the case of NIO in my opinion. The average price target is $68.26 (www.tipranks.com/stocks/nio/forecast) and investors are very positive on Nio's 2021 Q1 results (despite worse than estimated 2020 Q4 earnings).
HOW TO TRADE
Long term investors: just keep dollar cost averaging. I like to buy more on dips and pullbacks than rallies but that is my personal preference. You can keep buying the same amount as before.
Traders: you can enter now and place a stop loss below the 0 fib level on the daily. If your stop is triggered you can always buy back in if the price bounces back above that fib level. (This is also true for long term investors who want to be more conservative).
Safe trades and good luck!
===If you get anything out of this TA, please hit the like button and/or follow for updates and new publications.===
***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
Comment:
Bond yields are raising again. Keep an eye on price movement today. If the selloff continues the ideas on the analysis are invalidated.
Comment:
Nio broke below the 0 fib level support but bounced from the $38.2 historic support. A close above the 0 fib level would give reassurance that we are not heading to lower levels. The bounce from historic support was also important:
