How to Trade NIO to Record Highs on EV Boom

November 17, 2021 16:08

Electric vehicle (EV) stocks have surged in demand this year as the world transitions to greener technologies.  

With Tesla bursting through the $1,000 per share price level and holding on to its $1 trillion market cap, investors are now looking for the next hot EV stock that could race higher.  

Enter Chinese EV maker NIO. While this electric vehicle maker only has a market cap of around $60 billion it has attracted the interest of hedge funds around the world.  

Analysts have turned increasingly bullish on the stock with some calling for record highs in the next 12 months. Learn more, including how to trade it further below.   

Stock: NIO Inc
Exchange: NYSE
Symbol for Invest.MT5 Account: NIO
Symbol for Trade.MT5 Account: #NIO.US
Date of Idea: 17 November 2021
Time Line: 1 - 3 months
Entry Level: $45.00
Target Level: $70.00
Stop Loss Level: $32.50
Position Size for Invest.MT5 Account: Max 7%
Risk: High

* The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world. 

* The Trade.MT5 account allows you to speculate on the price direction of stocks and shares using CFDs. This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.

Source: Admirals Contract Specification  

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Why Trade NIO Stock? 

There are a variety of reasons why hedge fund activity has increased on NIO stock and why Wallstreet is turning increasingly bullish. Let’s have a look at a few.  

Reason 1: Electric vehicle car sales are set to boom around the world 

As governments attempt to tackle climate change head-on, many have made pledges to phase out the sales of combustion engine vehicles over the next decade. This means demand for electric vehicles is set to increase exponentially.  

In fact, by 2030 NIO CEO William Li believes electric vehicles will account for 90% of new car sales in China which is currently the largest EV market. Sales have already been growing all around the world with year-on-year growth up by a huge margin.  

Reason 2: NIO’s battery-swapping service has analysts very excited 

NIO stands out from the rest of the EV stocks as it has a battery-swapping service. While most electric vehicles need to be plugged in to recharge, NIO drivers can simply drive into a battery-swapping station and exchange their depleted battery for a fully charged one in just a few minutes.  

There are more than 500 battery-swapping stations in China and the government have provided subsidies to build more. One is currently being launched in Norway as well. NIO says this service makes the cost of an electric car $10,000 cheaper.  

Reason 3: Supply chain constraints are coming to an end 

NIO’s recent earnings report showed mixed results. While the EV maker beat revenue estimates, the company’s fourth-quarter guidance was lower than expected. This is due to supply chain constraints that have plagued every automaker in the world.  

However, analysts are pointing to the fact that these constraints are now coming to an end which means NIO has the ability to build more cars. An important factor, considering the company is now moving into new markets such as Norway and the US.  

Reason 4: Hedge fund activity has increased  

According to data from TipRanks, hedge funds have increased their holdings in NIO stock by 3.5 million shares over the last quarter. The steady buying from hedge funds is a growing trend in the EV sector and is one to watch for the future.  

Source: TipRanks, 17 November 2021 

What are Analysts Forecasting for NIO Stock? 

According to analysts polled by MarketBeat, there are currently a higher amount of buy ratings on NIO stock than sell ratings. The buy ratings have also increased in number over the last month. 

Source: MarketBeat, 17 November 2021 

An Example Trading Idea for NIO 

An example trading idea for NIO could be as follows:  

  1. Buy the stock on a break above $45.00.  
  2. Target above the record high at $70.    
  3. Place a protective stop loss at $32.50.   
  4. Keep your risk small at a maximum of 7% of your total account.   
  5. Time Line = 1 – 3 months  
  6. If you buy 10 NIO shares:  
    • If target is reached = $250 profit.   
    • If stop loss reached = $125 loss 

Risk management is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade.  

The example figures above have been calculated using the Admirals Trading Calculator which enables you to view what your profit or loss could be based on the numbers you input – a great tool for traders!   

How to Buy NIO Shares in 4 Steps  

With Admirals, you can buy shares in US companies and ADRs (American Depositary Receipts) like NIO with a low commission of just $0.02 per share and a low minimum commission of just $1.   

  1. Open an account with Admirals to access the Trader’s Room.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for NIO at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.   

Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance. 

Click on the banner below to buy NIO stock today! ▼▼▼ 

Do You See NIO Moving Differently?  

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance NIO’s share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  


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  • The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    
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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.