NIO Inc. Elliott Wave Analysis ( 21-05-22 )

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NIO Inc. Elliott Wave Analysis

Here is our blog’s NIO Inc. Elliott Wave Analysis for the 21st May 2022.

Fundamental Observation :

  • Long term view of EV sector still promising as most countries are increasing their efforts to reduce carbon footprint.
  • NIO taking pro-active steps to reduce possible US intervention on delisting Chinese ADR with secondary listing in HK & SG.
  • Short term view still relatively weak as market sentiments are volatile.
  • Global supply shortages, inflation and geo-political risks are still weighing high on investor’s minds.

Elliott Wave Observation :

  • Midst of a deep Wave 2 corrective structure in White in the larger degree.
  • Viewing it as a 5-3-5 (A)(B)(C) Zig Zag in Cyan.
  • Likely to have an extended Wave (C) in Cyan with a Fibo Extension up to the 161.8%.
  • 1st Fibo Confluence Zone forming at the Fibo Ret 78.6% & the Fibo Ext 138.2% with a possibility of a Harmonic Gartley Pattern.
  • 2nd Fibo Confluence Zone forming at the Fibo Ret 88.6% & the Fibo Ext 161.8% with a possibility of a Harmonic Bat Pattern.
  • Currently viewing Wave [4] in Green as an {a}{b}{c} in orange to complete at the upper boundary of the down sloping channel.
  • Current price rally in the lower degree not so convincing as it does not seem to be backed up by strong volume.
  • High probability that Green Wave [5] completing the larger degree White Wave 2 will conclude somewhere in the Green Dotted Accumulation Box.

My Trade Plan :

  • Since our last NIO Inc. Elliott Wave Analysis, Nio’s stock price has corrected extensively more than 70% since its ATH at $61.95.
  • The $10 mark is a huge large number psychological level where previous market “Gaps” will eventually be filled.
  • Current phase could possibly be the “Accumulation” phase for the next market cycle up from a Wyckoff perspective.
  • If the proposed Green Wave [5] does make a last bid attempt to break below the last market structure low at $11.64, it would probably wipe out the SL of most short term reversal traders and long term “Weaker” hands.
  • A potential “Break & Retrace” by the BB would be also be in line with Wyckoff’s Spring Break and Test reversal in the Accumulation phase.
  • Approaching this as a long term positional play with upside bias back to at least its previous high.
  • Start dollar cost average accumulation in tranches in the Green Dotted Box up to a maximum of 5% of long term portfolio.
  • Not expecting NIO to fall below SL region of $5.50 unless something happens drastically with the fundamentals of the company.

Kindly note that this is not financial advice, just my humble opinion and trade plan.

Please DYODD ( Do Your Own Due Diligence ) before taking any trades.

Share Your Views

How many of my fellow traders agree with me regarding our NIO Inc. Elliott Wave Analysis ?

Do comment and share your thoughts in the comments box.

Trade Safe and Prosper.

For more potential trade setup suggestions on the US Stock Markets, check our Blog Posts On US Stocks.

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For more articles on the Elliott Wave Principle, check out our other posts in our Elliott Wave Blog.

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