Nio (NYSE: NIO) stock price broke out of the downtrend last month and is on its way to retest the downward trendline. The stock price for the EV manufacturer slid by 24% after making a new monthly high at $15.41 in August. The shares are currently changing hands at $11.72.
The decline in the price of NIO shares can be attributed to the recent decline in US tech stocks. A 0.7% increase in retail sales was recorded in July 2023, compared to the expected 0.4% increase. This led to investors fearing another rate hike which triggered a sell-off in US equities.
Chinese EV Stock Suffer Amid Tesla Price Cuts
Recently, Tesla announced price cuts of around 6% in Model S and X prices. A price cut was also announced for the Model Y later. This move came after Tesla in China reported a 31% decline in sales in July. This led to a 1.7% to 5.2% decline in the stock price of Chinese EV manufacturers.
China also recently reported very weak economic data that suggested a slower-than-expected recovery after the end of the lockdown. This triggered a sell-off in Asian equities. The effects of the data can also be seen in the NIO stock price, as it has slid 24% within just two weeks.
NIO Retests Trendline After Breakout
The price chart for NYSE: NIO shows the successful attempt of the bulls to break out of the trendline at the end of July. Currently, the price is retesting the trend line for potential support. Additionally, the price is also trading close to the middle of the $8.2-$14 range. The bulls need to hold the $10.75 level to evade a bearish NIO stock price prediction.
I expect a bounce soon from this level due to the confluence of the range mid and the trendline. For this to happen, the bulls must find support around the range mid of $10.75 or the trendline. If the bears break below the $10.75 price level, a retest of the range low of $8.2 would be on the cards.
In the meantime, I’ll keep sharing updated NIO share price analysis and my personal trades on my Twitter, where you are welcome to follow me.
