Shares of Chinese electric vehicle maker Nio Inc (NYSE:NIO) are trading lower Thursday morning, with investors appearing to take profits after a recent surge sent the stock to a 52-week high. Here’s what investors need to know.
What To Know: The recent rally in Nio shares was ignited by the company’s report of record-breaking vehicle deliveries for September and the third quarter, which demonstrated robust demand and successful portfolio expansion.
Nio announced it delivered 34,749 vehicles in September, marking a 64.1% increase year-over-year and its best monthly result ever. The strong month capped a record third quarter, with 87,071 units delivered, marking a 40.8% rise from the same period last year.
Fueling the growth is the success of its new, more affordable sub-brands, ONVO and FIREFLY, which are broadening Nio’s market appeal beyond its premium electric SUVs. Despite Thursday’s pullback, the impressive delivery numbers have helped propel Nio’s stock to a 65% year-to-date gain.
After climbing 20% in the past month alone, it is common for some investors to sell shares to lock in profits. “Profit-taking” can create downward pressure on a stock, even if the underlying company fundamentals remain strong, as traders rebalance their portfolios.
Benzinga Edge Rankings: Benzinga Edge stock rankings reflect this recent run-up, assigning the stock a powerful Momentum score of 89.17.
NIO Price Action: Nio shares were down 4.20% at $7.52 at the time of publication Thursday, according to Benzinga Pro. The stock is trading near its 52-week high of $8.02.
The stock is trading well above its 50-day moving average of $6.14, suggesting a potential support level, while the 100-day and 200-day moving averages at $5.00 and $4.61, respectively, indicate longer-term bullish trends. The recent high of $8.02 may act as a resistance level, and a breach below the recent low of $7.50 could signal further downside.
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How To Buy NIO Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Nio’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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