Nio, Tesla Shares on the Rise

NIO shares are trying to extend their recent hot streak

by Josh Selway

Published on Jul 10, 2019 at 8:57 AM

Electric automakers Nio Inc (NYSE:NIO) and Tesla Motors Inc (NASDAQ:TSLA) are on the rise this morning. For China-based NIO, the shares are set to add more than 8% at the open after the company reported better-than-expected second-quarter deliveries. By the numbers, the company sent out 3,553 vehicles, compared to the top-end estimate of 3,200. Meanwhile, it's worth noting that the Wall Street Journal reported that passenger car sales in China (subscription required) rose in June for the first time in over a year.

This extends a hot streak for NIO shares. Another win today would be a seventh straight, and the pre-market gains would have them testing the $4 level for the first time since late May. At the same time, this comes after a huge sell-off from March to June that saw the equity fall from around $10.50 to $2.35. Analysts have a 12-month price target of $5.42.

As for Tesla, the stock is also set to rise after Bloomberg reported on an internal memo suggesting the company is about the increase production at its factory in Fremont, California. TSLA recently shot higher thanks to impressive second-quarter delivery and production data, helping the shares take back their 50-day moving average. The equity still sports a year-to-date deficit of almost 31%, but is gaining 2.1% in electronic trading.

In the options pits, there's a heavy build-up in front-month positions on Tesla. Specifically, the July 240, 250, and 260 calls all hold at least 22,800 contracts. Those who bought to open the calls are expecting TSLA stock to rise sharply in the coming weeks.

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