Since bottoming in November last year, NIO has been in a strong uptrend and recently pulled back after rejecting the IPO lows. During the current uptrend, NIO has been rejecting and riding the 20MA all the way up and yesterday, NIO pulled into the 20MA due to the recent market weakness. Today, NIO created a beautiful inside day candlestick right above the 20MA. This setup is called the Holy Grail setup where a strong, uptrending stock hits and rejects the 20MA during a pullback.
Entry - 4.21
Stop Loss - 3.80
Target 1 - 5.25
Target 2 - 6.50
Note - I also noticed NIO's price action is well correlated with the Hang Seng China stock index (Ticker: HSCEI). HSCEI has been in a pullback phase and has yet to bounce like the US markets today. I believe HSCEI will follow the US market price action today and gap up/run when the China stock markets open tonight.
Entry - 4.21
Stop Loss - 3.80
Target 1 - 5.25
Target 2 - 6.50
Note - I also noticed NIO's price action is well correlated with the Hang Seng China stock index (Ticker: HSCEI). HSCEI has been in a pullback phase and has yet to bounce like the US markets today. I believe HSCEI will follow the US market price action today and gap up/run when the China stock markets open tonight.
Comment:
I had expected NIO to take off by now. Tightened stop loss to just below the previous candlestick. If NIO takes not show strength tomorrow, I will close this position.
Trade closed: stop reached:
Stopped out NIO at 3.99. This has been a tricky week but I'm glad I tightened up my stops when I did. I had previously regretted tightening stops on FTNT but tightening stops here actually worked out for the better. NIO is now lower than my original stop loss saving me half my risk on this trade.