Nio Inc (NIO)

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Nio Stock Surges Amid Easing Covid-19 Restrictions
By: Schaeffer's Investment Research | May 31, 2022

• As a result, Morgan Stanley called the electric vehicle maker a research tactical idea

• Year-over-year, NIO remains down roughly 55%

Chinese electric vehicle (EV) maker Nio Inc (NYSE:NIO) is up 3.1% to trade $17.09 this morning, as Shanghai looks to reopen its economy after Covid-19 curbs with a stimulus package that will encourage developments in cloud computing, artificial intelligence (AI), and blockchain technologies. As a result, Morgan Stanley called NIO a research tactical idea, predicting a rebound for the equity as it benefits from such stimulus programs and resumes sales.

Analysts are bullish towards Nio stock, with seven of the eight in question calling it a "buy" or better, while the 12-month consensus target price of $41.55 is a lofty 137.8% premium to current levels. Meanwhile, the 78.40 million shares sold short make up 5.1% of the equity's available float.

Short-term options traders are also optimistic. This is per NIO's Schaeffer's put/call open interest ratio (SOIR) of 0.54, which sits higher than only 2% of readings from the past 12 months. In simpler terms, these traders have rarely been more call-biased.

Nio stock has struggled so far in 2022, but the equity is today pacing for a second-straight close above its 30-day moving average, and fourth consecutive daily win. What's more, the shares are testing resistance at the $18 region, which has been capping the security since April. Year-over-year, NIO remains down 54.9%.

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