What is Next for NIO?
A look at NIO price action. Plus, trade ideas and which options I'm considering.
NIO broke through AVWAP with strong volume to start the trading week, which was outlined in yesterday’s newsletter.
Wednesday also showed strong volume, although a little less of it, but the price action did not continue higher. It would have been nice to see.
That said, the pull back was minimal and shares are still poised for a move higher.
RSI and MACD are both in positive territory with room to move higher.
The 20-day simple moving average (SMA) crossed above the 50-day SMA, another bullish signal highlighting the nearer term trend is pushing higher than the intermediate.
In other words, the trend is up and we should see buyers step in for more.
If we see a sharp reversal, we will need to see which levels hold up as support and which are broken through.
Only after this additional information comes in can you determine the right trade to take.
You don’t want to mistake a shake out for a reversal, entering a short position just as shares are ready to rip higher.
This is a common and often costly mistake.
One way to minimize this type of miss is to identify the levels that need to be broken before entering a trade. This will help you make higher quality entries which lead to better probabilities and more profits.
Additionally, I don’t have time to watch the screen all day so I make my assessments the night before and set up alerts for the following day at these key price levels.
I like NIO for more upside and have identified where I plan to enter and execute the trade as well as which options I will consider.
Here is how I’m planning to trade it.
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