NIO extends slide on persistent risk-off temper


  • NIO inventory extends decline on Monday as danger aversion leads the best way.
  • Different EV shares reminiscent of Rivian and Lucid additionally suffered massive losses.
  • Sector out of favour and prone to stay in order macro components too highly effective.

UPDATE: NIO is down over 1% heading into the shut, buying and selling at $23.82 per share. World shares edged decrease in the beginning of the week, undermined by mounting geopolitical tensions round Ukraine. The market’s sentiment soured after US President Joe Biden mentioned on Sunday that the nation would reply “swiftly and decisively” if Russia invades Ukraine. US indexes spent a lot of the day within the crimson, however ended the day inconsistently. The Nasdaq Composite was the perfect performer, down measly 7 factors on the time being. 

Earlier Replace: NIO shares opened the week decrease on Monday, buying and selling down 2.1% at $23.58. That is consistent with different EV shares because the NASDAQ opened down 0.3% after the international minister of Ukraine reiterated that his nation remained steadfast in looking for entry to NATO. A proper treaty between Ukraine and NATO is a crimson line that Russian President Putin has mentioned might result in conflict.

Although I’m lengthy NIO, within the quick time period I don’t see it making a lot floor. I might and will actually promote and re-enter when the timing is correct, however it’s a small long-term place in my portfolio. The inventory has a number of headwinds from Chinese language tech regulation to macroeconomic components. NIO is down 24% yr up to now (YTD). By comparability, Tesla (TSLA) is down 18% YTD. Rivian (RIVN) is down 43%, and Lucid (LCID) is down 32% up to now in 2022.

Clearly then, this isn’t the sector to be in. For the sake of comparability, the S&P 500 is down 7% in 2022 and the Nasdaq is down 13% YTD. This exhibits how vital the broad macro and sectoral components will be in your funding course of. Everyone knows oil costs are elevated and stay so on account of Russia, Ukraine tensions and forecasts for international financial progress. The XLE Vitality sector is up 27% up to now in 2022. The monetary sector additionally advantages from greater rates of interest and is up 3% up to now this yr. Regardless of falling markets, money is just not essentially king. Inflation is clipping 7% of your money within the financial institution at present.

NIO Inventory Information

Just lately NIO launched some strong January supply numbers. Progress of 33% yearly was robust regardless of a fall in month-on-month comparisons. This isn’t uncommon because of the Chinese language lunar new yr slowdown. XPENG (XPEV) and LI Auto (LI) posted related yearly and month-to-month progress charges. There is no such thing as a doubt the EV market is rising shortly and sure will simply be the mainstream auto market within the subsequent ten years.

NIO faces robust competitors from home and international rivals. XPeng (XPEV) introduced final week plans to develop into Europe, following on from NIO saying in December that it was targetting Germany, Sweden, Holland and Denmark.

NIO Inventory Forecast

Under $27.34 NIO stays bearish. It wants to interrupt above to regain some stability, however within the present atmosphere that’s unlikely. The sector is out of favour and the macro backdrop continues to worsen. Anticipate a transfer to as soon as once more take a look at $20. Breaking $20 sees a quantity hole till $14.  

NIO chart, weekly




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