Nio Inc – ADR (NYSE:NIO) shares are trading lower Thursday as Chinese stocks push down because of COVID-19 omicron variant fears. This has caused much volatility in Chinese stocks.
Nio stock is trading in a pennant pattern and looks to have bounced off the support level in the pattern today.
Nio was down 5.48% at $36.20 at market close Thursday.
See Also: Why Nio Shares Are Falling
Nio Daily Chart Analysis
- Shares look to be forming into what technical traders call a pennant pattern and are bouncing off support Thursday.
- The price has been condensed between narrowing highs and lows for months getting ready for a possible breakout in the coming months.
- The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), showing the stock has been trading in a period of bearish sentiment.
- Each of these moving averages may hold as an area of resistance in the future.
- The Relative Strength Index (RSI) has been falling the past few weeks and now sits at 38 on the indicator. This shows that more sellers have been pushing into the market. The stock is nearing the oversold area.
What’s Next For Nio?
Bullish traders are looking to see the stock bounce off pattern support and head higher. Bulls are looking to see the stock continue to form higher lows and break above the resistance level. A break above resistance may cause the stock to push higher and see a period of strong bullish movement.
Bearish traders are looking to see the stock fall below the pattern support level. Breaking below the pattern support could show a bearish move is incoming. Bears are looking to see the stock hold below the moving averages for bearish sentiment to stay in the stock.
Photo: Courtesy Nio
