Following an upgrade by Goldman Sachs, Market Rebellion co-founder Jon Najarian bought call options in NIO Inc (NYSE: NIO).
What Happened: Goldman Sachs analyst Fei Fang upgraded Nio from Neutral to Buy and announced a $56 price target.
Fang cited the potential of Nio’s ET7 sedan as a reason for the upgrade. The Goldman Sachs analyst sees 65% upside from current levels for the Chinese electric vehicle maker.
The stock is also getting a boost following positive comments on a constructive U.S.-China meeting from a Beijing diplomat.
Najarian’s Take: China has been inflicting the pain on themselves, Najarian said Thursday on CNBC’s “Fast Money Halftime Report.”
“As soon as they put the guns back in the holsters, that’s the time to buy,” he said, adding that “at least for the time being they have.”
All of the Chinese stocks are “exploding to the upside” and people have been piling into the stocks and options in “big numbers,” Najarian said. “So that’s why I followed in.”
Related Link: Looking At NIO’s Smart Money Trades
Once the Chinese government stops inflicting pain on its own stocks, the companies can go right back to work, and right now most of them are trading about 50% lower than their all-time highs, he said.
“As soon as that pressure stopped, these stocks went zip to the upside so that’s why they became so attractive to us.”
NIO Price Action: Nio has traded as high as $66.99 and as low as $20.60 over a 52-week period.
The stock is up 7.38% at $36.14 at time of publication.
Photo: courtesy of NIO.
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