NIO: Is this sell-off for real?

29 мар. 2021 г.

Hello traders and investors! Let’s talk about NIO today.

First, NIO lost downwards the Descending Channel we discussed in our last study, so it just resumed the bear trend until the next support level. And as usual, the link to my previous analysis is below this post.

The $ 35 area is interesting, as NIO filled an open gap, and it found a support there too (black line). When a stock is near a support level, the Risk/Reward ratio usually is very high, and if NIO reacts around here would be an amazing sign.

Now, let’s see the daily chart:



Let me be clear: The trend is bearish, and we have no clear reversal sign ahead. But I’m very curious about the volume seen in the past days. During the entire last bear leg, after it found a top around the 21 ema at the $ 46.28 (black line), it dropped with a very low volume. And when it started to get closer to the $ 35 area the volume started to increase again. What’s more, Friday’s bullish reaction had a higher volume than usual.

Usually, this indicates that this is not a real sell-off, but since NIO is quite weak and we have no reversal sign ahead, there’s nothing interesting to do. But I agree that if we see any bullish sign this week, it could offer a brilliant buy opportunity for everybody who wants to buy NIO or increase position, as the R/R ratio is very high.

Let’s see how NIO will play out in the next few days, and remember to follow me to keep updated about our daily studies, and if you liked this idea, please, support it!

Thank you very much.