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Nio (NYSE: NIO) stock price has had a remarkable fall from grace. The shares plunged from its all-time high of $66.96 in January 2021 to a low of $7.01. Its total market cap has dropped from over $90 billion to $11.46 billion. It has lagged behind the performance of other Chinese EV companies like Xpeng, Byd, and Li Auto.

Nio earnings ahead

Nio is one of the leading electric vehicle companies in China. It sells several car brands in the country and is seeking to enter other markets like those in Europe. The most recent data shows that Nio delivered 15,959 vehicles in November, 16,074 in October, and 15,641 in September.

In all, Nio has delivered over 142k vehicles in 2023 alone, a 33.1% YoY increase. This makes it one of the fastest-growing automakers in the world. Nio has also made several announcements this year, including the launch of a smartphone. It also received a $1 billion investment from Abu Dhabi in June.

Most recently, Nio partnered with Chengan Automobile on its battery-swapping technology. The partnership is aimed at making Nio more profitable a few months after it ended its free battery swap. Nio also slashed workers recently.

Nio and other electric vehicle companies in China are facing substantial risks as the economy slows and the pace of manufacturing grows. We are also seeing this trend in the United States, where dealers have warned about oversupply.

The next important Nio news will be the company’s earnings, which are scheduled for Tuesday. Analysts expect the company’s revenue will be $2.66 billion in the third quarter, an increase from $1.8 billion in the same quarter in 2022.

Nio is also expected to remain in a loss-making zone. They expect that the company’s loss per share was 23 cents. In its most recent results, the company’s revenues rose to $1.2 billion, missing analysts estimates by $1.2 billion. It lost 51 cents per share. 

 A look at Nio’s put and call options shows that most investors have a favorable view of the company. Its total call volume stands at 29,108 while open interest is over 1.4 million. Put volume is 8,480 while its open interest is 655,180. This is a sign that investors are generally bullish about the stock.

Nio stock price forecast

(Click on image to enlarge)

NIO chart by TradingView

Turning to the daily chart, we see that the Nio share price has been in a strong downtrend in the past few months. It is now hovering near the lowest level since July 2020. Along the way, the stock has remained below the 50-day and 100-day moving averages.

At the same time, the shares have formed a falling wedge pattern. In price action analysis, this pattern is one of the most bullish signs in the market. Therefore, based on the options data and the falling wedge pattern, there is a likelihood that it will bounce back after its earnings on Tuesday. If this happens, the shares will likely retest the resistance at $8.

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