XPeng stock price has pulled back this month as concerns about the rising trade issues remain. XPEV has dropped from the year-to-date high of $27.17 on March 10 to the current $17.97. It has moved to the lowest point since February 25. This article explains why the XPEV share price may surge soon.
XPeng stock price technical analysis
The weekly chart shows that the XPEV share price has pulled back in the past few weeks. It has dropped below the crucial support level at $23.55, the highest swing in July 2023.
On the positive side, the stock has moved above the 50-week moving average, a sign that bulls are in control for now.
The most important catalyst for the stock is that it has formed a cup and handle pattern, a popular bullish continuation sign. This pattern has a horizontal line and a rounded bottom. It also has a consolidation as it forms the handle section. The recent decline is part of the formation of the handle section.
Therefore, the XPEV stock price will likely have a strong bullish breakout in the coming weeks or months. This view will be confirmed if the price rises above the key resistance level at $23.55. If this happens, the next watch target will be $40.67.
This target is derived by measuring the distance from the cup’s upper side. It is also a notable level since it is along the 50% Fibonacci Retracement level. A drop below the 50-week moving average at 50-week moving average will invalidate the bullish view.
Read more: Here’s why the XPeng stock price may surge 140% in 2025
Why XPEV may bounce back
There are a few reasons why the XPeng stock price may stage a strong comeback. First, XPeng and other Chinese EV companies will likely not be affected by the ongoing trade war between the US and China. That’s because Xpeng does little business in the US, and has established itself as a key player in the Chinese market.
Second, this trade war may force Beijing to allocate more stimulus cash to the economy. Such a move will likely offset the potential economic weakness in the country. Beijing is mostly focusing on high-tech industries like in the electric vehicle sector.
Third, XPeng’s business is growing as the number of stores in the country rise. The most recent numbers showed that it had 690 stores in China, a figure that has continued rising. It has also grown the number of its self-operated charging networks.
These initiatives have recently helped to push its revenues substantially higher. Its total revenue rose by 52% in Q4 to $2.21 billion, led by its vehicle sales, which made $2.0 billion.
Most importantly, Xpeng’s business has grown in line with its gross margins have risen to 14.4%. This means that its gross margin figure is approaching Tesla’s, which stands at 17%.
Further, analysts are optimistic about XPeng stock, with the average revenue growth for the current quarter being 15 billion yuan, a 129% increase from the same period last year. Its annual revenue will jump by 95% this year to 80 billion yuan, followed by 108 billion yuan in 2025.
XPeng has other catalysts, including the upcoming launch of its flying car this year or in 2026. This means that it may become one of the biggest players in the eVTOL space.
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