Nio stock price crash gains steam as vehicle deliveries surge: is it a buy?

Nio stock price continued its recent downward trend even after the company announced a big increase in its January deliveries. It crashed to a low of $4.52, its lowest level since August last year and 43% below its highest point in September last year. This article explores whether it is safe to buy the dip.

Nio deliveries continued soaring in January 

A report released on Sunday showed that Nio’s business is booming as deliveries soared. The company delivered 27,182 vehicles in January, up by 96% from the same period last year. This growth helped it to cross the important milestone of 1.02 million vehicle deliveries.

The company’s deliveries were made up of 20,894 vehicles in its premium NIO brand, while its ONVO brand sold 3,481. Its FIREFLY beans sold 2,802 vehicles.

This increase happened as demand for its ES8 continued soaring, with its cumulative sales hitting 60,000. The 60k milestone happened two weeks after the vehicle crossed the 50,000 milestone.

This growth has been driven by the rising demand for electric vehicles in China, which has become the biggest market in the industry.

At the same time, the company will likely benefit as more countries start pivoting to the United States because of Donald Trump’s erratic behavior. For example, China has inked a deal to send about 49,000 EVs to Canada while paying a 6% tariff, down from 100%.

Similarly, the European Union has moved to reduce the bottlenecks that Chinese companies faced when selling their vehicles in the region. Additionally, Chinese EV brands have become more popular in Mexico and other countries like Brazil.

At the same time, China is taking more measures to prevent price wars across key industries, a move that should, in theory, improve its margins.

Nio earnings ahead 

The next important catalyst for the Nio stock price will be its earnings, which will come out in March this year.

The average estimate among analysts is that its revenue growth continued in the fourth quarter as its deliveries rose. Nio’s deliveries rose by 66% to CNY 66 billion, while its loss per share improved from CNY 3.17 to CNY 0.05.

If this estimate is correct, the annual revenue will be CNY 87 billion, up by 32.5%. Analysts expect the growth will accelerate this year, reaching CNY 126 billion, up by 44.7% YoY. Its loss per share is expected to continue improving as the company works to move towards profitability.

Nio stock price technical analysis 

The daily timeframe chart shows that the Nio share price has been in a strong downward trend in the past few months, moving from a high of $8 in October last year to the current $4.52. It has now moved below the 61.8% Fibonacci Retracement level.

The stock has remained below the Supertrend indicator, a sign that bears remain in control. It has also moved below the Ultimate Support of the Murrey Math Lines tool at $4.70.

Nio has remained below all moving averages, while the Relative Strength Index (RSI) and the Stochastic Oscillator have continued falling this year.

Therefore, the stock will likely continue falling as sellers target the extreme oversold level of $3.9. It will then bounce back later this year and move to the Strong, Pivot, Reverse level of the Murrey Math Lines tool at $5.47.

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