NIO Stock News and Forecast: Why is NIO down again? Earnings good but delivery growth slows

• NIO shares drop slightly in early trading on Wednesday ahead of results.
• The company releases results after the close on Wednesday.
• NIO is poised to break out if results are positive.

Update: NIO stock is poised on Wednesday but unlikely to see too much action until the company releases results after the close. The stock is muted on Wednesday trading at $44.21 in the early stages for barely any change. $47.39 remains key to break higher and should lead to a test of $54.86 as volume drops between these resistance levels. We just need a catalyst to ignite the move, perhaps results can do the trick.

NIO shares shed some recent gains on Tuesday with the stock closing down just over 2%. NIO is still stuck in a range trading zone with little direction evident. Perhaps results later on Wednesday can help give the stock some direction. NIO has been struggling since the whole China data crackdown affair escalated, with many Chinese stocks caught in the crossfire. First, it was DIDI then the crackdown spread to other names such as Tencent Music (TME) and Tencent Holdings (TCEHY), as well as the education sector. Institutional investors decided enough was enough and began selling their positions or at least reducing them. Cathy Wood’s ARK funds one of the more high-profile sellers.

NIO has not been directly involved as the crackdown has appeared to focus on those companies which generate and store a lot of data on Chinese citizens. But Tesla has previously had some concerns with reports earlier in the year of their vehicles being barred from Chinese military compounds. Tesla has managed to overcome these headwinds and the stock has strengthened recently. Tesla being the sector leader it tends to set the tone and recent gains and strong earnings from Elon Musk’s company may have a positive read across for NIO stock.

NIO stock forecast

July 27 marked the recent low and NIO has managed to recover well from here but has not yet broken higher to end the bearish trend. We can see the series of lower lows and lower highs. In order to break this trend, NIO needs to break $47.39. The current price zone is a high volume traffic area, so it is no surprise NIO is stuck here. Breaking $47.39 should see a sharp move higher as the volume profile is pretty light above here, meaning the price should accelerate.

Recent earnings from Electric Vehicle makers have been strong and delivery numbers showing impressive growth. Tesla, the sector leader, led the way. We are therefore skewing our view to NIO posting strong numbers and the stock breaking $47.39 and accelerating higher over the next few sessions. We would caution against taking a position before earnings but instead look for earnings to confirm our view of a break of $47.39 and then an acceleration. Otherwise, the stock will remain in a bearish trend with the next support zone in the low $30s.

NIO daily chart