Okay, so the long-awaited Neo Day is right around the corner on January 9th. We also have Neo deliveries coming out soon as well, and with Neo attempting to break that previous resistance at 50 before then, we need to talk about what to expect leading up to Neoday, how to trade Neo this week, and some new risks that I do want to bring to light when it comes to Neo. I also want to talk about some of the association plays that are likely to rally with Neo because of this historic week. And of course, all I ask in return is that you hit that ravishing like button and also don't forget to subscribe either.

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Or maybe Zip Trader U is the perfect way to get you there. Okay, so before we talk about my excitement for Neo Day, let's get some of Neo's weaknesses and risks going into this week out of the way. First, Risk Factor: Numero Uno Delivery Numbers Eo announces their delivery numbers at the beginning of each month. so sometime around Monday or Tuesday, we are going to have delivery numbers for Neo.

The reason that I'm worried about this is because Neo provided guidance that projected 16 500 to 17 000 vehicles to be delivered in Q4 of 2020, and in November they had 5291. In October they had 5055 And so that means that we are up to about 10 346 deliveries reported thus far. So Neo now needs to hit 6 650 deliveries in December to hit that higher bracket of 17 000. And this is sort of where you get into that problem of high delivery expectations.

Neo has set such a high bar for itself that the positive effect of a beat on deliveries is going to be much less than the negative effect of a miss on deliveries. I mean, imagine the reaction if Neo missed even the lower bar on the estimate for delivery. even if that doesn't mean anything about Neo's long-term viability. if you just have one quarterly miss, that'll make everybody freak out because they've bought into the story that Neo is just going to keep going up and up and up and isn't going to have any pullback.

But obviously we know business is a little bit more nuanced than that. So my take is that delivery numbers have more potential to hurt us than they do to help us. And in order for that not to happen, I'd say that Neo needs to beat that higher bracket. Neo needs to make at least 6 654 deliveries so that it can hit that 17 000 upper range projection That it made last quarter.

And on the flip side, if they can beat that, hey, that's excellent, that would be a huge positive factor. I'm just saying that if they don't meet the expectations, it's going to be a lot more negative than this would be positive if they do. So be on the watch for that announcement folks. And by the way, Pro Tip: You can go to Neo's investor relations tab to monitor for it.

They'll post it here when it comes out. I'll even put the link in the description below to make it easier for you guys. Okay, Risk Factor: Numero Dos Tesla is cutting prices in China and China is getting rid of the Ev credit. Let's start with Tesla.

So in order to be more competitive, we know that Tesla has cut its price of the Model Y, but this is sort of a race to the bottom in terms of all of these Ev companies. In order to be more competitive with other companies, you go ahead and lower your price and then the other companies go and lower their prices. and then all of a sudden these companies have less and less margin for profit. This also comes at the time when China will be cutting their Eevee subsidies in 2021 by 20.

But the interesting thing about this is that I actually think that the Ev subsidies expiring is actually going to make Neo more competitive. Neo's business model is such that instead of buying the car with the expensive battery included, you buy the car and rent the battery, lowering the cost. They have a battery swap system, so you just rent the battery and then you go and you get it swapped out whenever you need a new one. so you're not paying the full cost of the battery up front makes it easier on the consumer, and it's also advantageous to Neo because they can upgrade the boundary whenever they want, and they also get reoccurring subscriptions.

But the reason that the disappearance of subsidies make this more important is because with the subsidies gone, that means that cost savings are going to mean a lot more. and Neo doesn't make you pay for the battery up front, so that means a lower cost of entry. Someone on the other hand that bought a Model S or a model Y, or a what's the other One model, uh, Model three, model three. they might be looking at the subsidy and being like hmm, this is getting more and more expensive.

I'm getting less and less for my money, whereas with Neo, you don't have to buy the battery and the car at the same time, you just buy the car and then the battery comes with it. In terms of the subscription, and with Neo's battery swap system, it's going to be looking more and more like an attractive deal. I think that if you consider Neo versus all of its competitors, Neo's going to have a better cost of entry because you don't have to pay for the battery. Okay, now Neo day, we have about three or four big things that we need to watch before Neo day.

Number One: As you all know, Neo's long awaited sedan. This sedan will allow Neo to actually compete properly. In my opinion, Neo has literally done nothing to compete in any real way with these small cars and sedans that have taken the lead over in China. Neo's current car line offers big fat Suvs, but the most popular cars in the eevee sector in China.

Our small sedans are really small, little crunchy cars. So by offering a sedan, that means that they can actually compete with all these companies. And I think the sedan if they do this properly, is going to be one of the biggest players here. and in the future Neo is expected to launch even more models.

I'd like to see even smaller cars because obviously that's what the market there is for in China. but right now the sedan is going to be a huge plus in terms of Neo's competitiveness. The second thing that we'll be watching for is battery improvements. As you know, Neo employs a battery swap system, so any new battery improvement will get to be enjoyed by any compatible earlier Neo vehicle.

And of course, a greatly improved battery will speak wonders about Neo's capacity to improve and compete with the other manufacturers, but it will also speak wonders about their business model. I've said this before, but one of the cons of buying electric vehicles like Tesla is that you buy it today and then maybe a year from now or two years they come out with a substantially better battery, and yours feels obsolete. And that might hold people back from buying now because they think that their battery is going to be obsolete in a few years. But with Neos models of battery subscription service where you just swap out your battery every time you need a new one, Well, it's so easy to upgrade.

Whereas with Tesla, if you'd like to upgrade your battery, you'd have to pay an arm a foot and probably a few toes in order to pay for a new battery. But along those lines, I'm also going to be watching the battery swap stations. I want upgraded stations. I want a new design that makes the process faster, more affordable for Neo to build, or anything that makes it more efficient.

Neos battery swap stations are what makes Neo so special, and it's a central and crucial part of Nioh's business success. Next, Autonomous Vehicles. will Neo update us on their progress in terms of implementation of self-driving car software and improvements. It's widely expected that Nia will be releasing an updated autonomous driving platform and will be giving an update on their use of lidar technology And anything that can bring in hype on Neo Day about the future of Neo's role in autonomous vehicles is going to be a huge deal.

Okay, so now what everybody wants to know what will happen to Neos price in the next week? I always drink tea. Folks, always drink tea. Well, it tends to be the case that most Catalyst plays perform better pre-catalyst than they do post-catalyst at least on any sustaining basis. We famously covered Tesla's Battery Day back in September, and pretty much 100 of the run on Battery Day was prior to Battery Day, with people hyping it up in their brains and their hearts with anticipation.

But once the mystique of Catalysts go away, News very rarely retains its strength for long, but we still have a whole week before Neo Day for more pre-anticipatory running, and that's what we're looking for. If Neo blows us away, I wouldn't be surprised to see a short-term post-reaction run either. But I think that once the mystique of Neo Day blows over, we do see Neo cooling off again until the next Catalyst, so that's something to be careful of. There's also the scenario that I mentioned earlier where Neo could miss on deliveries and that could cause some cooling off even before Neo Day.

But again, not necessarily a bad thing because if Neo then blows us out of the park on Neo Day, that means more upside. And let's be real: One month of bad deliveries doesn't really mean anything about Neo. You literally have one supply chain concern such as a chip problem, or you have some sort of other issue in terms of deliveries, and all of a sudden your delivery numbers are down. Does that mean that Neo's a company? Obviously not.

So obviously there's different angles and different ways that you can look at this. and I do want to go ahead and stress a little bit more of the risk here, because a lot of people will message me and say charlie, can Neo go down 10 Can Neo go down 20 Charlie? How far can Neal go down I know a lot of people don't like to hear this and they consider it fear-mongering when you talk about risk, but let's just be honest for a second, when you have a stock that can regularly go up double digits in percentage points per day, you also have a stock that can go down that much just as easily. I think that a lot of people sadly hurt themselves because they don't comprehend how easy and really how meaningless it would be. If Neo were to go down 20 to 30 percent For a new trader, a 20 to 30 percent pushback would be a disaster.

You'd lose all faith in Neo. Does that necessarily mean the underlying business even changed? No. Obviously, this is a bad case scenario that no one wants to hear about, but it's something that needs to be talked about. If Neo went down 30, that would literally just be going back two months in share price.

That won't change my long term outlook for Neo, but it certainly would destroy a lot of new traders. What happens is a lot of people will buy in as something goes up day after day after day, and then when it goes down 30, they'll be like, you know what, It's gone down too much, too much and then they're going to sell out. Had excelling 101 and obviously to mitigate this at Ziptrader we we talk about two different ways to trade things. You either have a short-term approach that talks about trading the individual dips and then selling out at recoveries, or you can just analyze the stock and say okay, well, how much is this worth and then say okay, well, I'm going to buy it at a dip and then just hold through whatever happens in order to get back to that price target.

Of course you still have a floor, but the key is just knowing exactly what your plan is when you go into the position. I don't want anybody buying this and then seeing it go down 30 percent being like, oh no, I didn't plan for this. and honestly, as somebody who's very bullish on Neo, both as a company and as a Momentum stock, you could think something's going to go to 100 or 110 in the next six months and then also think that hey, it could drop 20 to 30 before then. So I think the key here is just having realistic expectations and a realistic plan.

It's totally valid to play short term price strength, get in at Dips and then sell out when it starts dipping again at a certain price like for example validation. And it's certainly valid to say okay, well, this is a hundred dollar stock. This is a 110 stock I'm just going to buy now and add to my position and then write all the hubba Bubba until it gets back to 100 110. So anyways, I'm not trying to discourage Neo, I'm very bullish on Neo.

I'm just trying to say that you need to have a balanced view of what you're getting yourself into if you're going to take a position. Okay, I'd also like to play a little bit of mouth action to Expev and Lee. Both are trading well below their all-time highs and both have a lot of potential to run up. As association placed Neo, it tends to be the case when one good catalyst happens in one of them.

It tends to rub off on the others. And because these two are trading fairly low, I'd like to see some strength in them and play any run-ups if that happens alongside Neo. Okay folks, Well, what do you think? Let us know in the comment section below. Do you think? Neo is overvalued? Do you think they were going to get a preanticipatory run to Neoday? Do you think that Neo is just a sketchy Chinese company and they actually don't make vehicles and it's all a big smoke screen? Well, let us know in the comment section below.

And of course, don't forget to hit that ravishing like button. And of course, subscribe if you haven't already. Lastly, if you'd like four free stocks, Weeble has extended its for free stock promotion for folks who sign up and deposit with them before January 15th. So if you'd like to try out an excellent broker and of course would like four free stocks while doing that, go ahead and hit that link in the description below.

Anyways, folks, have a great day and I'll see you in the next video.