Stocks of the Chinese electric car maker
It was up 16% on Thursday in the absence of major news, leaving investors wondering what’s going on.
NIO (ticker: NIO) shares rose 23% on October 14 after JP Morgan analyst Nick Lai lifted his rating to Buy and his price target to $ 40. NIO shares have been around $ 26 to $ 28 since the upgrade.
The stock has held steady despite an average 20% drop for other electric vehicle stocksBarron’s song.
Stocks (TSLA), for example, fell 12% between October 14 and Wednesday.
But the market rallied sharply on Thursday and EV shares also rallied, up about 2.7% on average, excluding the massive NIO gains. The
increase 1.2% and
Dow Jones Industrial Average
Lai’s $ 40 price target could be an explanation for the NIO’s leap. This is a high street target for NIO shares, and Thursday’s move brought NIO shares below that mark about 25%. That’s where colleagues
(XPEV) trades against their highest analyst goals.
Technical factors also work. The volume of NIO shares and options has increased. The volume of stock options has increased by more than 350% compared to the previous few weeks. And stock trading volume has increased by more than 150% from the recent average. Higher-than-normal volumes, with traders buying or selling, can lead to large changes in price.
A fundamental element can also be worked out. China is moving to ban gasoline-powered cars by 2035. That is a huge boon for the EV industry. Half of all new cars sold that year must be “new energy vehicles” that include battery-powered options as well as fuel cells. Half could be hybrid – like one
That was big news, but it was launched a few days ago. Furthermore, China’s plan to reduce carbon emissions from exhaust pipes is not new.
News, however, could be a factor, and it could be. Li and Xpeng shares also had great days, up 10% and 9% respectively, but these two stocks rose 1% and fell 6% in the past two weeks. That is inconsistent with a 14% increase in NIO in the same time period.
Overall, the NIO gain was meaningful as all EV stocks rose as the market recovered from Wednesday’s sell-off. However, the extent of the NIO’s move is a mystery.
NIO shares burned, up about 690% year over year. That even surpassed Tesla’s massive 395% gain.
Write letter for Al Root at firstname.lastname@example.org