There is FOMO and then there is NIO !

2020년 12월 5일

After a crazy November for EV market and random EV stocks shooting up left and right, we need to say bye to the FOMO on EV and get back to reality.
So here I compare NIO, Xpeng, Li auto -just tried to focus on the main 3 Chinese EV stocks.

As we can see NIO has corrected to the 50 FIB line which is very good for us, the NIO investors, because this is the only way the stock can do its next move up – the stock was to parabolic to keep going up and this correction stables NIO on the 42$ line which means from here we have a safe ground to go to the next level (notice the 42 line in the image below and you will see it’s the POC of the volume acting as support).
I didn’t do the wave analysis lines on this chart to try and keep it clean and not too messy but if I did add it you would see we are in the end of the impulse wave and we may experience some convergence.
BUT the fundamentals on NIO are positive, the company keeps growing and delivering more cars, and backed up by government funding and the blue-sky act in China, as I always mention because this is NIO’s strongest card.
Xpeng is showing tremendous growth and deliveries of cars keep increasing, I am long on Xpeng just like I am long on NIO and the EV FOMO is over but NIO and Xpeng are here to stay in my opinion.
So the bad news is Mr. Andrew Left from Citron research – the notorious short seller has put a target on NIO as his next short but I really don’t think it will stop the stock from climbing but it sure will slow it down and make it retrace for a while.

If you don’t share the vision about NIO please check out their battery subscription program, that is pure genius and will bring a big revenue stream to the company along the years – I will not go into too much details here, just mention if you own a NIO car and you have the subscription you can stop and get your battery replaced to a new fully charged battery in less then 10 minutes and then be on your way, these stations will be spread all across China and will be fairly accessible.

So to sum up : the technicals are showing us a strong support from the volume side on the 42 line and the next move will be to the 47 line where stock will rest for a few days and then jump above the 50$ as consumers will come back to NIO after the “shorting” period has ended.

I’ve been long on NIO since it was 7.6$ and it paid off – this stock will cross 100$ by Q2 of 2021 that is my opinion , lets hope you will stay to enjoy the ride 😊

Trade safe.

1H time frame :