NIO Stock News and Forecast: Three reasons why NIO stock should be up again on Tuesday
[NIO Stock News and Forecast: Three reasons why NIO stock should be up again on Tuesday (fxstreet.com)](https://www.fxstreet.com/news/nio-stock-news-and-forecast-three-reasons-why-nio-stock-should-be-up-again-on-tuesday-202107201154)
7/20/2021 11:54:36 AM GMT | By [**Ivan Brian**](https://www.fxstreet.com/author/ivan-brian)
* **NIO stock stages strong intraday recovery on Monday.**
* **Shares opened nearly 4% lower but closed in the green.**
* **NIO breaks the 200-day moving average on Monday.**
A volatile day to say the least in NIO stock and one which many retail traders will be trying to get their heads around. A very weak opening was not too unexpected given the carnage across most equity markets. Take your pick from a list of excuses, be it Delta, earnings or profit-taking. Either way the market was in a bad mood, and bears were in charge of the narrative. NIO looked set to crash lower with an ugly open and a straight break of the 200-day moving average. What followed then was surprising, but regular readers of [**FXStreet**](https://www.fxstreet.com/news) will have given more credence to the zone of high volume that had been identified. [**FXStreet**](https://www.fxstreet.com/) said on Monday that the 100-day moving average would provide the last chance of support before the volume profile and hence support begins to weaken.
This is exactly what played out. The 200-day moving average was broken early on in Monday's trading, but the 100-day moving average and the psychological $40 level combined to halt the slide. We can also see from the [**chart**](https://www.fxstreet.com/rates-charts/chart) just how much volume there is at current levels, meaning the price is moving more slowly here. NIO rallied over $3 or 7% to close up on the day at $43.35, a gain of 1.3%.
**NIO stock forecast**
Now that the initial move has been stabilized, the hard work begins. NIO has retraced right back to the 200-day moving average. But looking at the 30-minute chart shows how little volume transacted at the low end of the day's range. It was not until the price rallied that volume picked up. Psychologically, this tells [**us**](https://www.fxstreet.com/economic-calendar/united-states) that there was little if any panic selling, a bullish argument. The point of control for Monday was toward the top of the daily range at $43.39.
[TradingView](https://preview.redd.it/pkmp5png5dc71.png?width=2107&format=png&auto=webp&s=5fb4d5b02a4057e8a87ff57fae428075b64aca4e)
Going back to the daily chart, the first obvious test for NIO stock is to retake the 200-day moving average. Once this is achieved, it is back on to trade above the shorter-term moving averages. This will also take out the high of Monday's candle and produce a bullish engulfing candle. There is still a lot of risk here, but the balance is now favoured to the upside in the very short term for three reasons.
1. NIO staged a huge intraday turnaround, flipping from red to green.
2. NIO should break back above the 200-day moving average on Tuesday.
3. The volume profile is high at current levels, meaning there is decent support around current price levels.
While the risk-reward is favouring gains, it is not a strong risk reward. Breakouts and trends are the strong moves to get on, and there is nothing in sight until $45 is cleared. This makes good risk management even more necessary. The market has turned choppy, and with earnings next week from Tesla, that is likely to continue.
[TradingView](https://preview.redd.it/pz4tlom76dc71.png?width=2107&format=png&auto=webp&s=971b6bbbe9e8dd02fbc81025f38e009638e04914)
https://www.reddit.com/r/StockMarket/comments/oo1e0u/nio_stock_news_and_forecast_three_reasons_why_nio/
