Current Market Dynamics
The latest NIO Elliott Wave Analysis seems to have taken a “Contrasting” view of how our blog has viewed the Chinese electric car maker from what happened in the past few months.
Previously, our view was that NIO may drop even deeper for a potential “Double Combo” Wave 4 correction in White.
This was due to the China govt’s hostile crackdown across all sectors at that point in time.
But the latest price action based on our current NIO Elliott Wave Analysis seems to show otherwise.
It seems like the political tensions are dissipating and investors are hoping to catch a beaten down stock at a good price.
Plausible Completion Of Wave 4
Somehow, the current consensus is that the Wave 4 in White might just have completed.
Although not very convincing, this Wave 4 in Blue is likely unfolding in the form of an single (A)-(B)-(C) corrective structure instead of a double.
Personally, I reckon the (C) leg does not exactly qualify as the perfect text book style “Ending Diagonal” but it will have to suffice for now.
Possible Change Of Structure
The previous NIO Elliott Wave Analysis from May to July in which we viewed the NIO price action as a potential C-Leg of a “Expanding Flat” in the higher degree.
Is now looking more convincingly as the start of Wave (1) in Blue of the larger Wave 5 in White.
Potential Wave 5 Recovery
The reason why we are changing our perspective on NIO is mainly due to the manner in which Wave (2) in Blue of the larger Wave 5 in White is panning out.
We are viewing this Wave (2) corrective structure as an [A]-[B]-[C] corrective structure in Green.
Possible Harmonic Pattern
Which has tapered and reversed “Coincidentally” at the Fibonacci 88.6% zone of the previous proposed Wave (1) in Blue.
Potentially forming one of my favourite Harmonic Patterns of all time, the “Bullish Bat” pattern.
If the current NIO Elliott Wave Analysis holds true, we are anticipating an impending Wave (3) rally that could potentially take NIO higher.
And according to the Elliott Wave Theory, the end of Wave 5 will surely break above the previous ATH of $61 to complete the 5 wave sequence in the higher degree.
The immediate invalidation zone is the $30 mark where we are forecasting as the start of Wave (1) in Blue.
This is primarily based on the Elliott Wave Theory Rule where Wave 2 cannot retrace more than 100% of Wave 1.
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