Peter Smith
NIO stock has quietly delivered three consecutive monthly gains, marking its first such streak since the explosive rally of 2020. Trading around $7.37, this pattern has caught the attention of investors wondering if the Chinese electric vehicle maker might be turning a corner after years of decline.
Chart Analysis: Technical Signs Point to Recovery
The monthly chart reveals some encouraging developments for NIO. The company has achieved three straight green monthly candles for the first time in years, echoing the pattern that preceded its remarkable run from under $5 to over $60 in 2020. According to trader Shaun Trades, this technical setup could signal a potential turning point for the struggling EV stock.
While current trading volume remains lighter than during the 2020 surge, accumulation is beginning to build. A solid support zone has formed between $5-$6, creating what appears to be a reliable price floor. Looking ahead, the next resistance levels sit around $12, with a larger target near $20 if bullish momentum continues to strengthen.
Fundamental Drivers Supporting the Recovery
Several factors are contributing to renewed optimism around NIO. The broader EV market is showing signs of stabilization, with government incentives and steady demand in China helping the sector recover from its recent downturn. The company has also made progress on cost reduction initiatives, bringing it closer to sustainable profitability.
NIO continues to differentiate itself through innovative battery swap technology and autonomous driving capabilities, while its expansion into European markets offers long-term growth potential beyond its home base in China. These developments are giving investors fresh reasons to reconsider the stock after an extended period of weakness.
What to Watch Going Forward
NIO's three-month winning streak may represent the early stages of a broader recovery, but several key factors will determine whether this momentum can be sustained: maintaining support above $7, attracting increased institutional volume, and capitalizing on China's evolving EV policies alongside international expansion efforts.
If the current technical setup holds, NIO could potentially retest the $12 level and even challenge $20, reviving hopes for a sustainable turnaround. While risks certainly remain in the competitive EV space, the combination of improving technicals and fundamental progress suggests this stock may be entering a new recovery phase.
Peter Smith
