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NIO still looking for a bottom

  • The fall in NIO shares accelerated its collapse on Monday, losing around 9%.
  • NIO shares have been hit by the SEC naming it for possible delisting from New York.
  • Nio Inc. Obtains Singapore Listing Approval to Counter Potential SEC.

Update: NIO ended Monday at $13.56 per share, down 9.12% on the day as stocks extend their bearish run. The Dow Jones Industrial Aversa lost more than 600 points, while the S&P 500 fell about 3.3%. The worst performer was the Nasdaq Composite as it lost around 4.29% on the day. Financial markets started the week on a back foot amid persistent inflation and growth concerns, coupled with the crisis in Eastern Europe. The European Commission is frantically seeking to agree a full Russian oil embargo, but is still unable to replace the region’s energy resources.

Previous Update: NIO opened the trading week the same way it ended the last, dominating the price action and sinking the stock a little lower. At the time of this update, nearly an hour after the start of regular trading on Wall Street, NIO stock price is down 7% on the day, below $14. Shares of Chinese automaker EV are approaching year-to-date lows on March 15, when Nio opened at $13.25 and hit a price of $13.01. The stock market rout, especially in high-growth sectors like electric vehicles, added to fears that this stock could be delisted in the United States are a dismal combination of fundamentals for the NIO bulls, who had experienced a large success with this one in 2020.

NIO stock closed lower again on Friday as – surprise, surprise – investors decided the stock was no longer investable in its current form. NIO stock has fallen more than 10% in a week as the potential delisting from US stock exchanges hits investor sentiment. To recap, the SEC has named many potential Chinese companies to be delisted due to their compliance with the Foreign Company Equity Liability Act.

Companies are required by law to declare that they are not controlled or owned by the Chinese government. US regulators also require Chinese companies to be inspected by the Public Company Accounting Oversight Board.

NIO stock news: Do US traders care about Singapore listing?

Initially, Nio was not among the first group of companies named for possible delisting. most prominent was DIDI, which had listed in New York in a high-profile IPO. This has put many Chinese tech stocks on notice and investors have taken a very cautious view of the sector. However, the SEC added NIO to its list last week, which led to an immediate wave of selling pressure on the stock.

NIO had previously listed in Hong Kong to offset any potential delisting. This was probably done once the initial names were released. NIO then followed up last week by seeking and obtaining preliminary approval to list on the Singapore Stock Exchange. Hong Kong is considered the main roster with Singapore as the secondary roster. However, NIO has a strong US-based retail customer base. Or rather it was, many may have already sold. Many U.S. retail customers will not have access to trade on the Hong Kong or Singapore exchanges and many may not want it regardless of access.

NIO stock was already under pressure before this radiation potential. The number of deliveries in April had fallen nearly 50% from March as the Chinese lockdown hit supply and delivery. Nio Inc. delivered 5,074 vehicles in April compared to 9,985 in March. Other Chinese electric vehicle makers XPeng (XPEV) and LiAuto reported similar monthly delivery drops for the same reason.

NIO Stock Forecast: Relentless Downtrend Will Continue

$13.01 appears to be the target for NIO shares as the newest low and so small support. Considering the bottom, it should break. NIO stock price is strongly bearish with $23.94 being the bullish pivot, so some distance away. The decline in RSI and IMF reinforces sentiment and looks overwhelmingly negative. Breaking $13 will bring $10 as an obvious target with a gap to close down to $9.38.

NIO stock price chart

NIO stock chart, weekly