PreMarket Prep Stock Of The Day: Nio

Benzinga’s PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

When an issue embarks on a rally, there are different catalysts that can keep it going. One that cannot be ignored is a change in ratings by Wall Street analysts.

A sell-side ratings change for Nio Inc – ADR (NYSE:NIO) has instigated another leg higher in the issue, making it Tuesday’s PreMarket Prep Stock of the Day.

The Nio Rally: The move higher in Nio was nothing short of spectacular, After ending 2019 at $4.02, the issue matched its December 2019 low in March 2020 at $2.11 and ended the month just off that low at $2.78. 

From that level, Nio went higher for eight consecutive months, reaching $57.20 in November 2020. Some profit-taking in December nudged the issue back down to $48.74 to end the year.

The volatility ramped up in January 2021, with Nio bottoming early on, then bolting to $66.99 Jan. 11.
After a brief decline to $55 area, two other attempts were made to breach that high in late January and mid-February. Both stalled at the $64.50 area.

The Nio Retreat: As investors rotated out of growth and into value issues, Nio fully participated on the downside price action.

The volatile issue did not find its ultimate bottom until May 13 at $30.71. That low just undercut both its November 2020 ($31.68) and its March ($31.91) lows.

The Nio Rebound: After making its low, the issue was higher in the next four out of five sessions, rallying to $34.33.

Following a small decline of 27 cents, Nio had another four-day streak to $38.91 on Thursday. Nio had a small day in the red on Friday, ending the week at $38.62. 

The Nio Upgrade: Before the open Tuesday and after a 2021 delivery update from, Nio Citigroup upgraded the stock from Neutral to Buy.

PreMarket Prep’s Take: When the issue was being covered on the show Tuesday, it was trading at the $40 area.

Co-host Dennis Dick was cautious on the rally and questioned whether the easy money has already been made.

“It has room to $45, but I do not expect it to rip back to its all-time high,” he said of Nio. 

The author of this article highlighted room on the upside at the series of highs in the $41.50 area from late April.

The rally has indeed continued, as Nio bottomed off the open at $39.94 Tuesday. At the time of publication, it was trading 8.7% higher at $41.98. 

The full discussion on the issue from Tuesday’s how can be found here:

Source: PreMarket Prep Stock Of The Day: Nio

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