Usman Salis
NIO is back in focus as the stock consolidates following a sharp rebound from summer lows. After rallying strongly, the EV maker is experiencing a natural pullback that's giving traders an opportunity to reassess entry points. With long positions nearly doubling short interest and momentum indicators cooling off, the current setup suggests potential accumulation before another push toward higher targets.
Long Positions Dominate Market Sentiment
Recent trading data reveals bullish positioning remains strong. According to trader Pax, patience is essential as the stock potentially revisits support levels.
On October 9, long volume hit 31.4 million shares compared to just 16.8 million in shorts - nearly a 2:1 ratio favoring bulls.
This imbalance reflects sustained investor confidence in NIO's ability to maintain its upward trend despite short-term volatility.
Technical Picture Points to Key Levels
The chart reveals a retracement from $7.80 down to $7.46, with several important support zones emerging:
- $7.10 (38.2% Fibonacci level)
- $6.82 (50% retracement)
- $6.54 (61.8% retracement)
If NIO tests the $6.30–$6.50 range, it could present an attractive accumulation opportunity for traders looking to position ahead of the next leg up. On the resistance side, $10.20 stands out as the next major target where profit-taking might materialize.
Momentum Indicators Show Room to Reset
The RSI has been running hot at elevated levels, signaling overbought conditions that typically precede healthy corrections. A pullback would allow momentum to reset and create space for another advance. Meanwhile, the Fear & Greed index shows greed is prevalent in the market, reflecting optimism but also serving as a reminder to practice disciplined risk management.
What's Driving the Bullish Case
Several tailwinds support NIO's outlook: ongoing EV sector expansion backed by supportive policies and rising global demand strengthens the long-term narrative, the technical breakout into higher channels has cleared the path for fresh targets, and elevated trading volume consistently above 48 million shares demonstrates robust investor engagement and conviction.
Usman Salis
