NIO approaching Fibonacci levels 0.618 at $5.56, I’m also waiting for bullish divergence to form on the 4H timeframe which has not occurred yet, so I see continued downside for now, we may be getting close to the turnaround again maybe near 0.618.
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Still expecting one more low with bullish divergence on 4H RSI, we’ll see
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Some progress lower today, aiming for the 0.618 at $5.56 for a possible turnaround.
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We’ve arrived at the target $5.56 and overshot a tad but recovered above the level, we also achieved 4H bullish divergence for now, however I would be cautious in the next 48 hrs to see how the 4H RSI shapes up and if the share price curls up to seal in that divergence. The daily RSI might not appear in divergence which is another reason to be cautious. I did buy some shares at this price though.
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Not too much to add, we did get a little bit of a 4H divergence but somewhat negated by another drop, the 2H is on bullish divergence as seen on the chart but I would like to see it on higher timeframes like 4H or Daily for more reassurance. Again the daily RSI is not in divergence which indicates to me caution. Kind of a big week as NASDAQ:RIVN is about to turn on the daily MACD and NYSE:BABA will be reporting midweek.
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So goes to show you what a daily RSI < 30 and bullish divergence on the 2H can do. We got a nice 12% increase today, we now have confirmed 2H and 4H bullish divergence which is a pretty good indication of a local bottom. Now what happens next is a good question, do we have the next wave up (Wave B or Wave 3?) or will we have a dead cat bounce? Not sure yet, but I do see a gap was created around $5.45-5.55 which likely but not guaranteed will be filled in the future, and we also again don’t have bullish divergence on the daily which could suggest we could go back below the local bottom at some point in the future. But for now I’m feeling good about my purchase, with NYSE:BABA earning coming up there is likely volatility upcoming in either direction. If we ever get daily bullish divergence, that would solidify my bottom was in.
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I sold some shares today, since I’m not sure what is going to happen tomorrow with the CPI, I’m still concerned about the gap that’s unfilled around $5.40 and the fact that we haven’t had daily RSI bullish divergence yet. If you look at NASDAQ:ENPH a while back when it hit its local bottom a couple months ago even that had a daily bullish divergence with OML (one more low), I believe the greater the price drop the more necessary it becomes. But if you look at the 1H or 2H there’s been no bearish divergence on the RSI yet so it could potentially rise before a fall later. I’m guessing there’ll be OML in the near future
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Great so with the CPI, NYSE:NIO has started its descent I expect this to close the gap below $5.40 and then some, perhaps OML, perhaps in a 3 wave move, ending with a daily bullish divergence likely indicating a true bottom
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Sorry I meant 5 wave drop in my last post, so I’m going to outline my theory for the next few days since I’ll be out of the country. We can see if I’m right or wrong about the daily divergence later.
So I circled a couple of RSI numbers on the 2H which shows a lowering of the RSI for a similar price which to me indicates downward momentum still, we made a jump up today to$6.00 for what could be a mini A-B-C correction in a wave 2(?) maybe opening a little bit high tomorrow morning stopping at the low $6 then having a big drop lower if this thesis holds water for a mini wave 3 of 5. The end result (and I’m not sure what $ it is) just that it will be OML will optimally be in daily bullish divergence on the RSI.
Alternatively, we have already hit the bottom since the daily MACD and 4H look good for upward motion so we’ll see. I’m less into that theory but is possible.
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So yesterday the idea was invalidated, but it could have been the waves just moved over as depicted, somewhat like NYSE:JKS was on the daily of you want to compare to that structure, that being said NASDAQ:TSLA is on fire right now so EV stocks might be in vogue at the moment. If $6.32 is breached I would say we are on our way up to $7, if it’s not and we see downward motion then the idea above is in play. I’m 5050 at the moment given the strength of the daily MACD being bullish
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Interesting Friday, we got one more high, wave Cs often have a 5 wave pattern so the pattern makes sense, but now the difficult part, there’s two counterweights happening, (1) the daily MACD is quite bullish, but the (2) smaller timeframes like 1H shown above has been in bearish divergence with the MACD turning bearish late Friday. I’m still not happy there’s no daily bullish divergence so I still think we go lower, I bought a couple of puts on Friday, either way I think we should see movement in the next couple weeks with clarity. I moved my buy order to $6.50 so I would buy stock if it hit $6.50, else I’m going to buy when we get a new low
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**EDIT: couple days not couple weeks**
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Sorry busy chart, Not much to add, we bounced off the 0.5 Fibonacci, looks like we are continuing the bounce this AM, I expect us to go lower afterwards. I will say the structure looks corrective which bothers me, but for now I’m patiently waiting for a better entry point. Again waiting for daily bullish divergence on the RSI
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So far so good, notice the 4H MACD just crossed the signal which is bearish, our last wave bumped off a little over 0.382, we continued downward. Now I am just guesstimating my personal guess of where we land, also with wave trading timelines aren’t important, it’s important to do your own diligence, with earnings coming up who knows what’ll happen, but for me what is most important is when we get a daily bullish divergence RSI which for me will trump any structure guess. Happy investing!
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Everything so far has been pretty spot on, the gaps been filled, but you never know, I’ve learned to be cautious and you should too! It’s also a little weird and I’ve pointed this out before the structure looks corrective and not impulsive which keeps me on my toes. That being said what if this structure is right so far, well a common point of completion for wave 3 is 1.618 as illustrated, but sometimes they extend hence the big box, the 2hr MACD is pretty strong bearish at the moment, so I expect a little bit more down but we’ll see on Monday! Im still waiting for daily bullish divergence on RSI. I’ll sell my puts at the bottom of the wave 3.
And by the way if the daily RSI ever drops even lower than it was earlier in the month 2/5/24 then that means we aren’t at the bottom. For now, I’m not buying stock and waiting patiently
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FYI I sold my puts for a moderate gain
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Difficult to say what's going on here, the pattern looks really corrective in nature, doesn't look impulsive, in fact because the previous commented chart exceeded the typical wave 4 fibonacci 0.382 I don't think the previous chart was quite right, I'm going to stay on the sidelines for now waiting for one more low, not sure if that'll be this week or after earnings but I'm still hoping for the bullish divergence on the daily RSI. I put another guess up on the chart.
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With todays drop, We have officially reached a daily RSI bullish divergence as of today, one of my big criteria for finding a bottom, that being said we have the 2H RSI breaking down which seems bearish, which is not shown here. With earning coming tomorrow, I can feel the heat from the shorts, I remain largely on the sidelines in case there’s a big drop tomorrow, but then again who knows, and just to reiterate again if the daily RSI makes a new low, then I expect that wouldn’t be the bottom either.
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This might be my last post on this thread. But we may have done it, is the bottom in? Let’s check:
[x] daily RSI on bullish divergence [x] weekly RSI on bullish divergence [x] monthly RSI on bullish divergence [x] recent gaps filled
I’m not sure if $4.80 is the true bottom but all of my criteria are complete for now and so I’m starting to layer back in, but not all in. With the recent price target changes I’m wondering if we are in an accumulation phase which might last a little while. I also want to warn everyone that Powell and job reports are this week so there might be volatility. Hope you liked this post and if you did give it a big thumbs up!
confirmation would be breaking out of this sideways channel. there is downside risk, though. so far, looking good for upside.
novamatic
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I was really hoping this would turn around. As you say, with earnings, who knows!?
tealeafbud
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@novamatic if it’s any consolation, I do think this price is actually not that bad to enter, and according to my projections after the final bottom, this stock price could either go in a wave 3 or a massive A wave correction which could take the price higher above $30. That being said it’ll take time
novamatic
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good call on waiting for bullish divergence on RSI. keep us posted.
Drunkmonk
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See my chart update :-)
novamatic
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@tealeafbud This is great. How do you get the chart to display like this? I'm confused as to how the 61.8 of the total move is at this level. I appreciate your help.
tealeafbud
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@novamatic, great question, I’m using Fibonacci retracement with logarithmic levels which is generally the preferred scale for Elliot wave theory, granted though on smaller price movements ie not NIO, often times the log scale is similar to the normal non log scale
novamatic
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@tealeafbud thanks. is that setup in the chart or in the Fib tool? it looks like the chart is different. how do I adjust a normal chart, if you have time to share? thanks!
tealeafbud
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@novamatic sure definitely worth checking out a YouTube tutorial, but I just used standard RSI and MACD, changed the timeframe to the timeframe I’m interested in. The Fibonacci retracement is a drawn by me, but based on where I think the beginning and top of the previous wave was. Not sure if that answers your question