The Li Auto stock price has jumped, and is about to form a golden cross pattern that may push it much higher later this year. LI shares peaked at $28.6 on Friday, and is sitting at its highest level since October 30. It has jumped by over 56% from its lowest point in 2024. So, what next for the stock ahead of its earnings this week?
Li Auto stock price analysis
The daily chart shows that the Li Auto share price has been in a strong bullish trend in the past few months as we predicted. It has risen from the November low of $21.46 to almost $30. It formed a triple bottom pattern whose neckline was at $26.65. A triple-bottom is one of the most bullish reversal chart patterns in the market.
Li Auto is also about to form a golden cross pattern where the 50-day and 200-day Exponential Moving Averages (EMA) cross each other. A golden cross is one of the most bullish chart patterns in the market.
The Relative Strength Index (RSI) and the MACD indicators have all continued rising in the past few months. The MACD indicator has moved above the zero line, while the RSI has crossed the neutral point at 50.
Therefore, there are rising odds that the Li Auto share price will keep rising as bulls target the next key resistance at $31. However, a drop below the moving average at $24 will invalidate the bullish view.
Li Auto has key catalysts this week
Li Auto, a leading EV company in the electric vehicle industry in China, has several catalysts that may push it higher this year.
First, the company will benefit from the ongoing Chinese recovery, especially in the technology industry. As we wrote on Friday, the Hang Seng Technology stocks have surged in the past few weeks, with firms like Alibaba and Xiaomi being the best performers.
These companies have done well because of the ongoing Chinese recovery, which has been facilitated by stimulus. Data released last month showed that the economy expanded by 5% in 2024 and by 5.4% during the fourth-quarter.
Second, there are signs that Beijing’s authorities are working towards patching relations with its technology companies. After years of increased scrutiny, authorities are now focusing on supporting their companies as they compete with their American rivals.
Read more: Li Auto stock price analysis: the bullish case for this Nio rival
Li earnings ahead
The other catalysts for the Li Auto stock price will be its financial results scheduled for Tuesday this week. The most recent numbers showed that Li’s growth continued even as the EV industry remained being highly competitive.
Li Auto delivered 58,513 vehicles in December last year, bringing the cumulative deliveries to 500,508 vehicles. Its January deliveries stood at 29,927 vehicles, traditionally, a weak month for sales.
The most recent results showed that Li Auto’s third-quarter deliveries rose to 152,831, up from 105,108 in the same period a year earlier. Its total revenues rose by 23.6% to $6.1 billion, while its gross margin was 21.5%. These numbers resulted into income from operations of $489 million.
Analysts are optimistic that Li Auto’s results will be relatively strong. The average estimate is that its quarterly revenue will be 44.56 billion yuan, up by 6.7% from the same period a year earlier. The figure will bring the annual revenue to 146 billion yuan, a 17.8% annual increase.
Analysts also expect that its revenue for this year will get to 191 billion yuan, a 31% increase from the same level last year. Therefore, if these numbers are correct, it means that Li Auto is also undervalued since it has a forward P/E ratio of 17.8, much lower than other firms like Tesla and the S&P 500 index.
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