NIO’s fourth-quarter earnings event
In the previous article, we discussed some factors that could have an impact on NIO’s (NIO) valuation multiples in the near term. Though valuation multiples can help investors analyze a company in comparison to its peers, investors should also stay aware of the key support and resistance levels in a stock to better time their entries and exits.
Key support and resistance levels
As we noted earlier in this series, a couple of days after NIO stock started trading on the NYSE, it posted an all-time high of $13.80. Since mid-September 2018, the stock has largely remained confined within the price range of $5.90–$8.20. Any near-term stock price rally is likely to face resistance near $8.20.
As of February 21, NIO stock was trading on a slightly bullish note at $7.64. On the downside, the stock could find an immediate horizontal support level near $7.20 followed by a major support level near $5.90.
Since January 30, 2019, NIO stock price has stayed above its 50-day simple moving average, reflecting strength in its short-term bullish price trend. However, investors should also pay attention to its 14-day relative strength index figure, which is currently hovering at 56.8, suggesting neutral underlying momentum.
In the coming months, only an early violation of its key resistance level near $8.20 is likely to attract fresh buying in NIO stock.
As of February 21, NIO stock has fallen 3.0% month-to-date. Other Chinese companies Alibaba (BABA), Uxin (UXIN), and Tencent Music (TME) have risen 1.9%, 23.2%, and 13.0%, respectively, so far this month.
In contrast, Chinese tech giants Baidu (BIDU) and Tencent Holdings (TCEHY) have fallen 0.5% and 3.5%, respectively. Tesla (TSLA), General Motors (GM), Ford Motor Company (F), Toyota Motor (TM), and Honda Motor Company (HMC) have returned -5.1%, 1.5%, -1.0%, -1.6%, and -7.8%, respectively, so far this month.