Moon gang, i think it's time we have a talk about what in the world is going on with neo. In this video i will be doing a technical breakdown of the stock and laying out the carriers of support and resistance. So we are better prepared for the coming trading days before i get into all that, though, if you're new to the channel don't forget to join the moon gang by hitting the subscribe button, i'm working to hit 10 000 subscribers and your help with hitting that goal. Would be truly appreciated and, as always, if you enjoyed this video, don't forget to drop a like, because it really helps with getting it in front of other people who may be interested.

And now that i got that out of the way. Let's get started over the past week, the market was a mixed bag for ev stocks, tesla managed to hit a brand new all-time high, just below 608 dollars, but on the other hand there was a sell-off in workhorse, lordstown motors and neo neo closed the week out By dropping five percent on friday, which puts its stock at 43 dollars at this price level, that means that over the past week, neo has dropped 20 percent, but over the past three months it's up 140 percent and from the start of the year until right now It is up 970, with returns of this size, it's pretty much expected to have reasonable drawbacks. Anyway, here's the current technical situation we are dealing with as a quick recap for those of you who are new to the channel. Neo really started picking up in june.

Of this year and for a while, it was following this blue trend line and then in october, when the rest of the eevee sector was struggling, neil broke out above this trend line, hit a new relative high at 29, and once this trend line was reaffirmed, new Exploded upward this big red candle was formed when citron came out with its short seller report, but support was eventually found at 45 dollars and neil continued its rally to the current all-time high just above 57.. Unfortunately, since then the stock has been selling off and as of the most recent close, it is down almost 25. A lot of this recent bearish action was prompted by the fear and confusion surrounding the whole chinese stocks being removed from u.s markets thing. Now i covered this in more detail in my alibaba video, but here are the main things that you need to know.

Both the senate and house unanimously passed an act regarding auditing compliance and there's a very good chance that the president will sign it into law. With that being said, though, these companies have three years to comply, which is quite a bit of time, especially when you consider the amount of money at stake. So i'm really not that worried. I believe that most, if not all, these companies will agree to the auditing, but if they don't, they will be traded on a secondary market such as hong kong and these can be accessed through various trading platforms, such as interactive brokers.

In the end, i do understand why this whole situation is causing some investor hesitation, but you should know that there is plenty of time for these companies to get things figured out, and the government is just trying to protect us from situations like luck and coffee. Anywho back to neo, the stock recently broke through the support at 45, and the next major support isn't all the way down until 38, which is exactly where the stock has caught itself on multiple occasions from the most recent close to get to that support, the stock Would have to drop an additional 11? I have this area highlighted in green, because i think that it would be a good investment opportunity. Clearly, it's been proven that there is demand at this price level and finally, the rsi is starting to cool off, and on top of that, if the stock were to get to 38, there's a good chance that this 50-day, simple moving average would act as an additional Support if neo bounces here or if it pulls an early u-turn in terms of resistance, i would recommend watching 45 dollars 49 and then 54.. As a quick tip before we switch over to the four-hour chart, i would like to explain how we knew to not buy neo on these two down days when the stock was at the supports of 49 and 45..

The answer is twofold: first is in the rsi, if you take a look here, the stock was pushing higher, but the rsi wasn't. This is known as bearish divergence and it's a sign that the buyers are getting tired and it's indicative of a future decline, or at least consolidation - and second, is this 10-day simple moving average december 1st was the first time in quite a while that the stock definitively Broke below this moving average, so when you pair this breakdown with the bearish divergence in the rsi, we had two pretty strong sides that more downside was coming ahead. Fortunately, for us there is no longer any bearish divergence in the rsi and the stock is coming up on the incredibly important support of 38, which i believe will be strengthened by the 50-day moving average, as i mentioned before, if neo does get to this price level, I do think it would be an excellent investment opportunity and then i would be looking to ride those shares above the current all-time high of 57 and now to get a better idea of what might happen over the next few training days. Let's check out the 4-hour chart for those of you who are curious.

The name of this charting software is tradingview and there's a link to a free 30-day trial in the description of this video. Anyway, from the end of october, up until november 13th, neo stock was caught in this bear flag and then, when the citron short seller report came out, this triangle was formed and the stock eventually found support at 45. Then, on the back of pretty impressive delivery numbers and in overall positive earnings announcement, the stock rallied to the current all-time high and since then the stock has been in this bull flag on this time frame, you can more easily see that bearish divergence. I was talking about if you look at the high from november 13th and then the next high on the 24th.

The stock was clearly higher, but the rsi wasn't and since then it has been selling off more recently, though, the bears pushed the stock through the support. At 49, the bull camp came back swimming, but once again the bears pushed the stock through another support. This time. At 45., at this point there really isn't much in the way of stopping neil from dropping to the next support at 38.

I suppose there was some level of demand found at 41 on november 13th and the 16th, so it could potentially bounce there. But personally i will be waiting to invest at 38. moving forward. It would be extremely bullish if neil were to drop below the recent low around 38 without the rsi making a new low.

This would be bullish divergence and i would feel confident that the stock would bounce from there. Obviously, neo could definitely bounce earlier than that. I just want you to be aware of the technical situation that i'll personally be watching, for, as things continue to develop, both fundamentally and technically, with neo i'll make sure to keep you updated in future. Videos so make sure you have.

Your notifications turned on thanks for making it to this point in the video. I really hope that you found some value in it. As a quick reminder, i am not a financial advisor, so i would highly recommend that you complete your own due diligence with. That being said, though, i would love to know your thoughts on neo in a comment below.

Would you consider investing at 38 dollars per share and where do you see the stock going between now and the end of the year and as always, 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. All that engagement really helps me out thanks for watching and until next time best of luck in the markets. You.