Welcome back to the stock market folks! I hope that everybody had a merry Merry Christmas and are looking forward to the new Year. but now is the time to say goodbye to your families and hello to the stock market in this lovely video. We are going to be talking about the top three stocks for this week. But first, what what happened last week? Charlie? He had a short week last week, but Xl completed its merger with Pic and gave us quite the show.

Pre-merger Pic ran a massively, then post merger Xl went from lows at 17.25 to 36 dollars before cooling off. How about Splk? Folks who loved this play? Splk had gotten beaten down on earnings and on December 10th we talked about how this was a killer deal and talk about a recovery. Since then, this has been a by the book spoiled Brat play. We spoke about Bft and how they are merging with Pay Safe Up about 10 ish.

Nothing to write home about, but certainly postcard worthy and I still see a lot of opportunity here. Our favorite play last week was Ocgn. We briefed on it here and here because of its partnership agreement for a India coveted candidate. It ran up triple digits Sbe very impressive, breaking into new highs about 15 days before the merger and Aal sidelined until we get the stimulus deal actually passed.

But anyways, before we get into this video, the only thing that I ask of you in return is that you hit that ravishing like button. Also, don't forget to comment below and let me know what you're watching this week. And of course, this video is sponsored by the charming and handsome gentleman over at Ziptraderu. I don't know if you've seen this guy, but damn, if you'd like to learn how to trade, would like access to our private chat and of course our daily morning briefings.

I'll go ahead and put the link to Zip Trader you below, as well as the coupon code holiday 75 that will get you 75 off before checkout. Okay, Baba's valuation right now is ridiculously cheap. I mean, shockingly cheap. Every single time Baba got beat down this year, I've screamed bye bye bye and hold for the recovery, and that strategy has done very, very well for many of us this year, and this time Baba is down about 30 from highs in a record year.

We might even get an even juicier entry point if we let this settle down a bit. But before we get too excited here, let's go into the reason behind the beatdown: China is cracking down on some of Alibaba's expansion tactics as part of a way to discourage monopolies. Specifically, they are opening up investigations into Alibaba's practice of forcing merchants to have exclusivity agreements. What Alibaba does to some of its merchants is it says okay, well, you can sell on Alibaba, but you can't sell on any other e-commerce companies and China is investigating this practice in the pro.

But what does this mean for the company? Well, let's just play devil's advocate and assume that these investigations actually turn into a complete shutdown of this practice. How does that affect Baba's Bottom line: There's a very compelling piece of research on Seeking Alpha that gives an estimate that this would cause about a 0.2 to 0.4 percent hit to China's retail segment profits. And considering that Baba reported 35 year-over-year growth in the summer, it's hard for me to say that this sort of reduction warrants this massive of a drop. I mean, even if you cut the growth rate to zero next year, I still see Baba being way way undervalued at this price.

But the truth is that whenever something bad happens to a Chinese company, the level of overreaction is much much more intense than it should be. Because people are sketched out by China, You are essentially paying a much lower price on nearly every Chinese stock with bad news because of the China risk. and honestly, that's totally fair. You should be skeptical of China, but also understand that because we have cheaper valuations due to the China Risk, there's a lot of upside potential.

But what I think that a lot of people miss in this freakout is that Alibaba is largely a child of the Chinese Communist Party in the first place. You don't become the most valuable brand in a country like China without the government backing you and stifling your competition along the way. The real problem in my eyes is that Alibaba is a child that's gotten too far away from China's grasp and now it is misbehaving. So this is basically China reigning it in.

They'll force Baba to bow down and behave, and then Baba will bounce back. and then China will allow it to continue pushing ahead. Let's be real: China's economic policies are centered on dominating the economic landscape of the world and destroying their most valuable companies isn't the way they do that. Taking control of them and making sure they're loyal definitely is.

though Alibaba has been very strong this year. If you consider a 33 plus year-over-year revenue growth and a 35 year-over-year profit growth reported in the summer, and you compare that to say, Amazon's 27 in revenue growth just nine percent in year over year profit growth. obviously a good year. So does this crackdown threaten the growth prospects for Baba? Well, the short answer is probably, but not for long.

My opinion is that China is going to slap Baba around a bit and then Baba is going to settle down and start rallying back to all-time highs. Maybe they get rid of some of their lucrative practices, but it's not going to have a huge long-term dent on Baba's bottom line. At the same time, though, it is worth mentioning that China's crackdown on affiliate ant group is a lot more severe, whereas the crackdown on Alibaba is likely going to be much, much more mild. so make sure to make a distinction between those two.

And yes, Alibaba does own 30 percent of Ant Group, so it's not like this is an afterthought. But I'd still stress the importance of distinguishing between the two, because the composition of Alibaba's Holy Nevad Group doesn't imply that a hit to Ant Group is going to have that much of an impact on Baba's bottom line. I mean, with its recent sell-off Alibaba basically wiped out the entire evaluation of Ant Group and then some, and Alibaba only owns like 30 or 33 percent of Ant Group. So again, I think that comparisons between the two need to be taken as mostly fear related, since Baba and Ant group are both headed by the same leadership.

Cracking down on one can cause ripples of fear in the other, and so I guess they're both related in that way. But in terms of baba, I'd say under 250 is good. I'd say anything under 200 is great. I think that it's hard to argue that this isn't going to go back to 300 and way beyond.

Even the famous Arc funds Started buying baba at the first dips right up here and Baba is one of their biggest holdings and they bought it way way up here at a higher price. so they thought Baba was way undervalued. Even there Baba actually announced while I was making this video that they'd be increasing their repurchase plan. Faba wants to rebuy shares at these lowered prices.

It says a lot. It says the company believes the valuation is way too low and it wants to use that to its advantage. But unfortunately, with this sort of news, it's looking less and less likely that we'll get more discounts. But still, Baba is a great deal.

So again, if you can get it under 250, good, if you can get it under 200. Great. We'll see what happens. Okay, next, Osmt will be having their Fda approval on Tuesday.

This is for their Ms treatment. And yes, Fda approvals are certainly some of the most aggressive stocks that you can trade. But if you are up to the task, there's a lot of potential here. Just look at what happened last time Osmt got an Fda approval.

It tends to be the case that these Fda plays rally quickly and massively and then sell off, whether that be a post approval offering or whatever they tend to sell off afterwards. But they rally upon good news. So these are certainly short-term positions that we don't want to hold and hope with. You have to have a clear plan, You have to trade like a spoiled brat, but if we do get an approval, I could easily see 50 plus of upside here.

Just do not hold in hope. With this type of play, folks have a clear plan. Historically it never made sense to hold in hope. With this play and the way that I preach trading these is by trading pre-anticipatory runs in post-reaction runs, but definitely not gambling through the approval.

Even if this gets disapproved, a run prior can still be profitable. Okay, let's talk Neo. Have you guys heard of Neo before? Maybe you haven't. We are getting to the nitty gritty right before Neo Day.

I've already given my long term price target if Neo hits all of their goal posts at the same rate they've been doing. I see Neil at 110 by mid-2021 but there are two big catalysts coming up for Neo: number one, Neo Delivery Numbers, which should be coming out in the first week of January. Problem with Neo delivery numbers is that the expectation is always very high for these. Which means that these reports are a bit of a liability if they do really well.

Neo has a very high bar to cross because it's already factored in, but if they do just okay or they do bad, that can totally shatter expectations and have a very negative effect on the stock price. But on the other hand, we do have the second catalyst, which is Neo Day. Neo Day is where Neo will unveil its new sedan and its new technologies. I do think that Neo will do an impressive job on Neo Day, but I think that the hype before that is going to be the more important thing if we know anything about Neo investors and the stock behavior of Neo, it's that investors like to overly pre-factor in Neo's events beforehand, so I'd be on the lookout for pre-anticipatory running up to Neo Day.

If we don't get any and we get a blowout on Neo Day, that's fine too, then we'll get a huge post-reaction run, but I would be on the lookout for both. Be aware of that opportunity. It's also worth noting that Neo's recent offering will be used to develop new vehicles, continue its R D, and further develop its sales and service network, which are very good things for Neo. And I've said this before as well, but introducing a sedan on Neo Day is a huge deal.

The most popular Evs in China are either sedans or small cars, and Neo to date doesn't offer anything like that. A sedan will make Neo much much more competitive. Okay, and lastly, my bonus update on Sbe: Sbe has blown past its previous highs a couple weeks before its merger is going to go through. We spoke about how this was going to be a good deal after it got delayed into January and since then it's recovered pretty nicely.

But we still have about two weeks before this merger and I see a lot of opportunity here. I'd say we could certainly see a lot more action if we get another dip in the low 40s high 30s. I'd say this is a great play. Again, Chargepoint is a big deal.

It's the main player in the American market and even though Blink is going up massively, Chargepoint is way way ahead. So a lot of investors are going to be getting into Sbe before it merges with Chargepoint and we will see the opportunities here. Okay folks, well if you have any questions, feel free to reach out to us in the comment section below or join us on the lovely Ziptrader Circle Facebook group. If you're wondering what broker to trade these stocks on, Well, we always like to send new traders over to Evil and they are offering for free stocks if you both sign up and deposit with our link in the description below.

They have many things that we need as traders such as pre-market and after hours trading. They have tons and tons of really useful indicators and scanning tools. So if you are looking for a powerful broker and would like for free stocks I'll go ahead and put the link in the description below. Lastly, of course if you'd like to learn how to trade zip trader you is 75 off coupon code holiday 75.

Okay folks, well have a great day and we'll see you in the next video.