🚘 NIO: DERIVATIVES TRADING 🚘

🚘 NIO: DERIVATIVES TRADING 🚘

Nio was a mythical Chinese "meme-stock" from the pandemic time. It seemed that it was going to be Tesla's competition, but suddenly, many others appeared and it did not have the same boom. Likewise, geopolitical tensions make it an extremely delicate and dangerous movement.

At current price (20/02/23), the next strong support is at ± $7.50 USD. However, the next resistance is at ± $17.5 USD, and the big one at ± $22 USD. That's a risk-reward ratio of ±2, which might be acceptable for the extreme risk and patience. In that sense, an example of trade could be:
- Put (buy) at ± $9 USD
- Call (buy) at ± $17 USD
- Call (sell) at ± $25 USD

The main idea is being prepared for a fall in their next 4Q22 earnings, where it coincides with a weak bullish channel clash with a strong bearish one, and that points to a major explosive move. It will be crucial not to miss the ± $10 level from now on; f it breaks it, the new resistance would be at ± $12.5 USD and it would correspond to make a new follow-up.

The best analysis is yours!

Copyright: Joel Padilla 2023