One caller during Wednesday’s “Lightning Round” segment crazy money asked Jim Cramer about NIO Inc. (NIO) : “Pass, pass, hard pass. I’m not messing around anymore”, was his answer.
We took a look at NIO’s charts on July 9 when Cramer was also questioned about NIO on crazy money. At the time, Cramer told viewers to sell and we wrote: “If we knew what China will do and how traders will respond, a recommendation would be easy. NIO closed its lows on Thursday and that’s a good sign. Follow-up purchases today will things are improving. Keep holding longs and risk a close below $40.” Traders would have stopped by the end of the month.
In this updated daily bar chart from NIO below, we can see prices trading below the declining 50-day and 200-day moving averages. The trading volume has been declining for several months now and that tells us that traders have lost interest in this stock and have moved their attention and money elsewhere.
The On-Balance-Volume (OBV) line was flat and did not improve as prices rose in May and June. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart from NIO below, we see a bearish picture. Prices are trading below the falling line of the 40-week moving average.
The weekly OBV line is not helpful and the MACD oscillator crosses below the zero line for a straight sell signal.
In this daily Point and Figure chart from NIO below, we can see a potential downward price target in the $34 area. $34 will be a new low for the decline and could cause further losses.
In this weekly Point and Figure chart from NIO below, we see a price target of $31. A trade at $30 will be more bearish.
Bottom line strategy: NIO’s charts are not positive. Appearance.
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