NIO: Breaking Through Important Resistance Levels - but beware!

We see a strong bullish reaction in NIO's shares, which have been rising steadily since last week, when they approached their bottom at $7.

Around $7, we see a region of multiple support, present since June, but which has suffered several attempts to be breached during November and December, without success.

Now, the price has made a strong enough reaction to break through some important medium-term resistance points, such as the 21 EMA, and more recently, the previous top at $8.51.

In doing so, NIO's shares are sending a clear message that the medium-term trend is now upwards, as it is operating above various supports, and breaking through previous resistances.

In theory, the next resistances are NIO's next targets, such as $9.22, or even the gap open at $10.22. Remember, gaps act as magnets when the price reverses a trend.

Although this is a reading for the medium term, it's important to point out that NIO shares still face some problems in the long term, as seen in the weekly chart below:


Clearly, the area around $7 is the most important support here too, but since November 2021, the price has been in a persistent downtrend. We don't see rising tops and bottoms, and the 21 EMA could still be a resistance point, although the price is above it this week.

So, while buying with a focus on the medium term is technically plausible, caution is advised as the weekly chart is still in a downtrend.

I'll keep you updated on this, so remember to follow me to keep in touch with my daily analyses, and if you liked the post, remember to support the idea.

All the best,
Nathan.