Nio stock price has pulled back in the past few days, mirroring the performance of other Chinese electric vehicles. It was trading at $5.90 on Tuesday, down substantially from the year-to-date high of $7.01. Still, the stock is showing some bullish signals, which may lead to a strong comeback in the near term.

Nio stock price technical analysis points to a rebound 

The daily chart shows that the Nio stock price has pulled back in the past few days, moving from a high of $7 to the current $6. This retreat happened as investors booked profits after its double-digit gains.

On the positive side, this retreat seems to be part of the series of higher highs and higher lows that it has formed in the past few months.

Another positive is that the stock has remained above the 100-day Exponential Moving Average (EMA), a sign that bulls remain in control for now.

The stock has now moved slightly below the 38.2% Fibonacci retracement level. At the same time, the Relative Strength Index (RSI) has slumped below the neutral point at 50. The Stochastic Oscillator has also dropped below the oversold level  

Therefore, the most likely scenario is where the stock resumes the uptrend and moves to the key resistance level at $8, its highest point on October 1 last year. Such a move will be 35% increase from the current level and will be confirmed if it moves above the key resistance level at $7.

Nio share price chart | Source: TradingView 

Top Catalysts for Nio shares

There are some potential catalysts for the Nio stock price. The most important is that the company’s deliveries are rising and its profitability is improving.

Its recently released delivery numbers showed that it sold 29,356 vehicles in April this year, up by 22.8% from the same period last month. It brought the number of total deliveries year-to-date to 112,821, a 71% growth rate.

Its growth has beaten other companies in the industry. For example, in a recent report. BYD said that its vehicle deliveries dropped for eight consecutive months as competition rose. It sold 314,100 passenger cars in April this year.

Similarly, Nio’s growth was better than that of XPeng, which delivered 31,011 vehicles, up by 13% YoY. Li Auto’s deliveries rose slightly to 34,085 from 33,940 in April last year.

Nio’s sales are being boosted by the popular ES8 vehicle, which has become one of the most popular brands in China. 

It is now banking on the ES9 vehicle, which has moved into pre-sales, with the deliveries meant to happen on May 29. The new vehicle started selling at 529,000 CNY or $77,000, with the most premium one selling for 658k or $96,000.

The company has also started selling L80, the flagship brand of its ONVO brand that starts at $35,000. 

All this is happening at a time when the company has started being profitable. It made a $40 million profit in the fourth quarter of last year, and the management believes that the trend will continue in the foreseeable future.

The company’s sales jumped by 75% in the fourth quarter, with analysts expecting the upcoming results to show that its revenue rose by 109% to CNY 25.2 billion. For the year, the annual revenue will be CNY 130 billion, up by nearly 50%.

Additionally, the ongoing Iran war has pushed fuel prices higher, which will lead to more demand for electric vehicles in China and other markets.

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