XPENG -METEORIC RISE, MEANS METEORIC FALL !! XPEV AND NIO ANALYSSo in the last 3 days in particular , XPEV the Chinese electric vehicle maker, has been exploding up, and there are many reasons to this which we will cover here in a moment but as an investor who is heavily invested in XPEV this causes me reasons for concern.
In a lot of the cases (excluding Tesla), when we see a meteoric rise such ass XPEV and NIO had in the last few days, this will mean a lot of investors that don’t really analyze the company properly and just jumping in the hype – but these are usually short term investors who are looking to make a hit and run. For me as a long-term investor in the EV market that means bad news.
A bit of Technical:
IMPULSE WAVE - positive sentiment causes massive volumes that are unstable and not sustainable
There is a clear method to how an impulse wave should work, and when you experience 3 motive waves as we see here that are all extended one after the other that means the corrective waves are going to be just as sharp.
We are looking at retracing wave of 618 of FIB if the stock finishes its motive wave in these manner -which means stock will fall down below the 30$ line.
NIO Wave chart:
Lets talk FUNDAMENTAL :
-XPEV delivered 3,040 in Oct over 200% from the previous year and considering the COVID-19 environment around us at the moment ,that is tremendous in my eyes, add to that the fact that 70% of those were the new Sport sedan P7 which is getting very positive reviews.
The EV market is creating new companies like mushrooms after the rain , and though competition is good , inflating a market with so much money and so many brands before it matured enough to sustain it can cause a domino effect and drop the EV market down to new lows and requires us to be patient to see our investment going profitable again.
The earnings of Xpeng are coming in Nov 12 and are expected to be positive – and here exactly is the issue – if expectations from investors on earnings are so high , even positive earnings with a slight downside can bring the stock down like a house of cards at -10% and even more.
To sum up – I am a strong believer in EV stocks whether Biden wins or not, but I would say : don’t put all your eggs in the EV market as this can get rocky!
WE analyze the stock market acc to the great Ralph Nelson Elliot and combine that with fundamental and sentiment analysis on a theory we call Market Cycle Based Analysis and that gives us high prediction rate 😊
This is not a recommendation but our personal advise
Trade Safe, and invest smart !
