NIO Inc. ( NIO ) shares are in the spotlight Friday ahead of third quarter earnings on Tuesday before the market opens.

What To Know: Analysts estimate a loss of 24 cents per share and revenue of $3.26 billion.

For the prior quarter, the company reported a loss of 25 cents per share, beating the consensus estimate of a 30 cent-loss. Furthermore, NIO posted revenue of $2.65 billion, missing the consensus estimate of $2.76 billion.

NIO has a mixed track record of topping consensus earnings per share estimates and a weak history of beating revenue expectations.

NIO Analysis: The stock is trading within its 52-week range of $3.02 to $8.02, reflecting a volatile trading environment. Currently, NIO’s year-to-date performance stands at an impressive 21.1%, indicating a recovery from earlier lows, but the stock remains significantly below its 50-day moving average of $6.96, trading approximately 20.9% below this key technical level.

The Relative Strength Index (RSI) is currently at 25.29, signaling that the stock is in oversold territory. This could suggest that a rebound may be on the horizon, especially if buying interest picks up. However, the 200-day moving average at $4.98 provides a critical support level, as it is approximately 10.5% above the current price, indicating a potential area of resistance if the stock were to decline further.

Resistance is identified at $6.32, which aligns with recent price action and could pose a challenge for upward momentum. If NIO can break through this resistance level, it may pave the way for a more sustained rally towards the 50-day moving average. The psychological round number of $6.00 may also serve as a significant barrier to overcome in the near term.

As a mid-sized player in the electric vehicle market, NIO’s market capitalization of $13.31 billion positions it among the larger competitors in the sector. The stock’s recent performance, coupled with its technical indicators, suggests that while there is potential for a bounce, traders should remain cautious given the current oversold conditions and proximity to key moving averages.

The current setup indicates that a decisive move above the resistance level at $6.32 could signal a shift in momentum, potentially leading to a retest of the 50-day moving average. Conversely, failure to maintain above the 200-day moving average could lead to further downside risk.

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NIO Price Action: At the time of writing, NIO shares are trading flat at 0.19% at $5.415, according to data from Benznga Pro.

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