Hey: hey, hey! What is going on. I hope that you're having a fantastic day, my name is matt, and this channel is all about stocks trading and investing. Today, i will specifically be focusing on neo in this video. I will do my best to explain why the stock sold off this past week, especially on friday and after that i will be doing a full technical breakdown of neo stock.

So i can better showcase what i'll personally be looking for this upcoming week and better explain my own predictions, but before we get into all that, i'd like to take a quick moment to say thank you. This channel just hit 10 000 subscribers, and the support that you've been showing me is truly amazing. You really are the reason why i continue to grind it out, even during the tough times from the bottom of my heart. Thank you and now without further ado.

Let's get started as a quick fyi if you sense a hint of neo-optimism in my voice, it's because well, i want the stock to go up as i'm filming this video, i own call options on neo stock that expire on february 19th. Now, if you have no clue what that means, don't worry about it. All you need to know is that i would love if neo stock could rally right from here. Clearly, i am a biased party, but i will do my best to present both sides of the current situation.

So why did neil have such a rough week? Matt? Didn't you say last weekend that neo would have an amazing week because of the blockbuster neo day event. Well, yes, the stock did gap up following the neo day event, but there was absolutely no follow through instead, the stock sold off to the best of my knowledge. The reasoning for this was twofold. First, don't forget that neo is a chinese company and it was just announced that there's a new lockdown in beijing that will impact 22 million people.

For obvious reasons, this could dampen neo's production capabilities and it could even have an adverse effect on the entire chinese economy. This could easily translate to a drop in stock prices and reason. Number two is good. Old-Fashioned competition domestically neo was battling it out with companies like liado and alibaba, who just announced two new evs and internationally they're in a fight with even bigger named companies such as ford and tesla, and now, on top of all that, it was just reported that an Ex-Neo executive is working for foxconn technologies if you've been keeping up to date with my apple videos, you know that apple and foxconn are partners and apple just announced a new eevee initiative.

Personally, i do believe it was a bit of an overreaction, but the stock market really didn't like this new potential competition. So with the new lockdown and this guy signing on with foxconn technologies, my neo position has been hemorrhaging money with that being said, though, my long-term hopes for the stock are still pretty high. Let's check out, what's going on in the charts alrighty on the screen. Now is neo's daily chart.

I have a quick question for you. If you think at some point in 2021, neil will be trading at or above 75 dollars per share. Let me know by dropping a like, as of now, neo is trading at 56.27 and it closed out last trading week by dropping 7.5 percent. Fortunately, it is still up 15 in the year 2021..

This is the current technical situation that neo stock is in. For those of you who are new to the channel, here's a quick recap of what's been going on just so you know on the bottom. Here is the rsi technical indicator that stands for relative strength index and it basically maps out bullish momentum versus bearish momentum when the value is very high. That is a lot of bullish momentum and when it's very low it's a lot of bearish momentum.

It is very common to use this tool as a reversion play as in if it's very high, it's common, that the stock might sell off and if it's very low the opposite might happen. This will come into play in just a second, so neo came onto the scene in 2018, but it really picked up steam in june of this year and then in october, when the overall stock market was having a bit of a tough time, neo actually had a Technical breakout above this trend line all the way up to 29 dollars, and then it reaffirmed the trend line and exploded upward to its previous all-time high of 57.20 from there neo did sell off and it eventually found support at 38. When i say support, i just mean a price level at which the stock bounced. It is very important to know about levels of support and resistance, because they can act as support and resistance in the future.

For example, 38 dollars is exactly where neo bounced back on november 10th. On this second bounce, it went all the way up to 48, and then it came down and undershot the support at 38 and then went all the way back up to 59.. This particular rejection marked the formation of this triangle and in the world of technical analysis, we refer to this as a pendant. It can be a bullish pendant if the stock was going upwards into the creation and it's called a bearish pendant.

If the stock was coming down before the triangle was created in this particular case, we will call it a bullish, pennant and that's mainly because they commonly break upwards and that's exactly what neo did at first. It struggled at this previous resistance of 49 and then from there it shot up to the next resistance of 5420, and i would like to point out that this is exactly where the stock was rejected. On november 13th, let's fast forward a bit, the stock did go up a bit because of the excitement before the neo day event. And then, after the neoday event, the stock gapped up to 64.70 hit its all-time of 66.99, and since then the stock has been selling off and it really looks like we're on our way back down to 54 20..

The reason i'm calling this price level out is because in the world of stock trading, previous resistance can turn into support and vice versa. So, basically, i'm looking for this previous resistance to now act to support when neo comes down to it. Before we get into all the ifans and butts there's one very important concept. I need to explain to you.

We call it bearish divergence and i know it sounds fancy and confusing, but it's really not here's all you need to know. Neo stock went higher in between the 24th and january 11th, but the rsi value did not. This is referred to as bearish divergence, and it means that there was less bullish momentum here than there was here and it's commonly indicative of a future decline or consolidation. So, to put it another way, there was a high likelihood of this sell-off because the bull camp wasn't falling through on this gap up relative to the action we were seeing back in late november.

Just so you know, no technical indicator is perfect, but this is one great tool that you can easily use to help make more informed trading and investing decisions anyway for the upcoming week, the price level of 5420 is very much the line in the sands, for both The bulls and bears, if the bulls can protect this line and get a bounce. I would then look for resistance to be found at 60, followed by 64 and then 67 and on the other hand, if the bear camp ends up winning the fight at this price level, i would be prepared for a drop back down to the next support. Just below 50 personally, i am very bullish on neo and i would prefer that it bounces sooner rather than later, but you should be fully prepared for either scenario to play out, make sure you're closely watching how the stock reacts to 54 20.. Now, to get a slightly different take about what's going on, let's switch over to the four hour chart before i hop into this time frame.

I wanted to mention that the name of this charting software is trading view and if you are interested in trying it out, there's a link to a free 30-day trial in the description of this video. If you decide to sign up, it is a great way to support this channel. Okay back to neo, so i know there's a lot of lines and thingymajiggies and whatchamacallits on this chart and i'll quickly explain all of them from late october, up until mid-november, neo-stock was trading in this upward channel and in technical analysis. We referred to that as a bear flag and that's because they commonly break downward this time it broke downward and formed a triangle and, as we saw on the daily chart, we call those bullish pendants, because the stock was trading upward into the triangle formation and these Commonly break upward, that's exactly what neo did and it rallied to its previous all-time high from there.

The stock did end up selling off, and this was the opposite channel that we saw before these downward channels are referred to as bull flags and guess what that's, because they commonly break upward neo did break upward. But the action was a bit weird because it ended up riding this top trend line all the way down to this undershoot at 38. From there the stock did bounce and then that's when we got the formation of this triangle, which was that original bullish pendant that i pointed out to you on the daily chart. Eventually, this led to a breakout, followed by another breakout, followed by another breakout, followed by a gap up, and then things got a bit ugly.

Let me zoom in just so we can better see what is going on right now. So, following the neo day event when neo gapped all the way up to 66, i really thought i was one of the smartest traders alive, but the stock market has a pretty funny way of reminding you that you're, not because we were hit with the new lockdowns. The guy joining foxconn technologies and since then neo has pretty much been vomiting. Not only did it break through the support at the previous all-time high, but it broke through this trend line, which is a double bearish setup, and that's why i'm pretty confident that we are on our way to 54 20..

Of course, i would love for there to be in early u-turn, i'm just letting you know what i see in the current technical setup now. I really really hope that this doesn't happen, but if neo stock ends up breaking below this support at 54.20, i would argue that buying shares at the 50 price level would be a great long-term investment. As i said, i don't want this to happen, and i don't think that i will over this upcoming week, but just be prepared in case it does. If the market gods once again end up favoring the eevee sector in neoposal, utorrent or bounces off 5420.

I'm fully expecting there to be resistance at 60, which was previous support past that we have 64, which was previous resistance, and of course we have the all-time high at 67 in terms of the rsi. There isn't divergence or anything like that going on, but i would like to point out that when neo hit its current all-time high, the rsi got very high. In fact, it was all the way up at 85, and this is what i was talking about with the reversion play when there's a lot a lot of bullish momentum. This is commonly followed by less bullish momentum and more bearish momentum.

Hence the rsi dropped and so did the stock. In terms of this upcoming week, i can't guarantee which way neostock will go, whether the bulls will win or the bears will win, but i know it will be decided at 54.20. If we see a bounce, i would predict higher and if there's a breakdown i would get ready to say hello to 50 dollars a share. I would love to know your thoughts on neostock in a comment below my question.

For you, this time is pretty simple: when do you think that the stocks rebound will take place? Also, as a quick side note, a few of you have been asking me about a discord as of now i do not have one, but if there's enough interest, i would consider making one if that's something you want me to do. Let me know by commenting discord. Moon gang or anything like that, just so, i can judge the interest level and if you want free stocks, make sure to check out those links to robin hood and weeble in the description of this video. If you enjoyed this video, don't forget to drop a like, and if you haven't already don't forget to join the moon gang by hitting the subscribe button.

Your support is truly appreciated, thanks for watching and until next time best of luck in the markets, you.