NIO Plummets After Temporary Production Suspension

NIO remains up over 1,127% year-over-year, though

Digital Content Manager
Mar 26, 2021 at 10:38 AM
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The shares of Nio Inc (NYSE:NIO) are down 5.2% at $35.98 at last check, after the China-based electric vehicle maker announced a temporary production suspension at its Hefei manufacturing plant due to semiconductor shortages. The suspension, which will last five days, starting March 29, also led the company to lower its current-quarter delivery outlook to 19,500, down from its initial forecast of 20,000 to 20,500 vehicles. 

On the charts, the security has been struggling since its Jan. 11 all-time high of $66.98. Shares more than halved in early March after a number of bear gaps, though the $32 level served as a net. Since then, the equity has also been struggling with overhead pressure from the 20-day moving average. Year-over-year, though, NIO remains up an astounding 1,127.3%.

Analysts are split on the security, with five sporting a "buy" or better rating, while the remaining four carry a tepid "hold." The 12-month consensus target price of $56.83, on the other hand, is a whopping 57.7% premium to the stock's current perch. 

Drilling down to today's options activity, 158,000 calls and 108,000 puts have crossed the tape so far, which is 1.7 times the intraday average. Most popular is the 3/26 36.50-strike call, which expires later today, followed by the 35-strike put in the same weekly series, with news positions being opened at both. 

NIO options can be had for a bargain at the moment. The security's Schaeffer's Volatility Index (SVI) of 82% sits in the eighth percentile of its annual range. This suggests the equity is sporting attractively priced premiums right now.

 

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