Nio Inc. (NYSE:NIO) shares are trading lower Tuesday alongside many other Chinese stocks amid concerns over the COVID-19 variant omicron.
Another factor that may negatively impact Chinese stocks is the sharp rise of the U.S. Producer Price Index, adding to inflation worries.
Nio Daily Chart Analysis
- Shares look to be falling out of the bottom of what traders call a pennant pattern. The price has broken below pattern support and could be due for a further bearish move if the stock is unable to reclaim this support level.
- Nio stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
- The Relative Strength Index (RSI) has been pushing lower the past few weeks and now sits at 34. This shows that sellers are in control of the stock and the quantity of selling pressure is heavily outweighing the buying pressure.
What’s Next For Nio?
Nio shares look to be falling below the pattern support in a pennant pattern. This is a signal that bearish traders could be taking control of the stock as it was unable to continue to form higher lows. Bulls are hoping to see the stock reclaim this support level and be able to hold above it once again.
Bears are hoping to hold this area as resistance, which may cause a strong bearish move in the future if the stock is unable to cross back above this support level.
Nio was up 4.58% at $37.37 at time of publication.
See Also: Why Nio Shares Are Falling
Photo: Courtesy of nio.com
