BABA

recession2016 · May 27, 2015

any opinions on BABA? it's off the lows and seems to be in a bullish trend

does anyone have an argument over why this stock should be avoided? or an argument to be bullish?

i'm looking to get in if support keeps holding at $90 with a target of $120

OTM-Options · May 27, 2015

recession2016 said:
any opinions on BABA? it's off the lows and seems to be in a bullish trend

does anyone have an argument over why this stock should be avoided? or an argument to be bullish?

i'm looking to get in if support keeps holding at $90 with a target of $120

PROS

Once it passes $100.00 then the sky is the limit.
No resistance beyond $120.00.
Bullish market.
Recent IPO, less than a year.
Big player in the China market.

CONS

N/A

Chris Mac · May 28, 2015

recession2016 said:
any opinions on BABA? it's off the lows and seems to be in a bullish trend

does anyone have an argument over why this stock should be avoided? or an argument to be bullish?

i'm looking to get in if support keeps holding at $90 with a target of $120

Well, LT trend is down.
New highs lower new lows lower...
So for the moment, no need to hurry for a buy.
Furthermore, 95 dollars (tested last week) is a STRONG resistance because it was the former support (cf graph). You will notice that 95 dollars is the middle of the January gap. Gap not filled : resistance confirmed.
90 dollars, support? Maybe, a bit weak IMO, because you got an unfilled gap in May.
I would rather wait Baba to fill the gap and test his LT support @79/80.
Watch if 79/80 holds.
Yes? => Buy. SL 76 dollars or higher if you buy @81/82.
Hope it helps.

CM

xandman · May 28, 2015

Nice pick. It's showing some classic technical patterns that could produce a pop: crossover, shallow bowl formation etc.

Be aware, that the Chinese government is trying to put the breaks on rampant stock speculation. I'm in. I am using this as a rough delta hedge to make a short vol position in FXI.

ScalperJoe · May 28, 2015

recession2016 said:
any opinions on BABA? it's off the lows and seems to be in a bullish trend

does anyone have an argument over why this stock should be avoided? or an argument to be bullish?

i'm looking to get in if support keeps holding at $90 with a target of $120

It popped on the last earnings report on huge volume. Also, the 437 million employee shares lock-up has expired, and a lot of these shares have probably been absorbed by the market already, given the recent price action.

As the op mentioned, that gap above $95 has not yet filled, and is acting as resistance. That gap needs to fill if BABA is going to have follow through from its last report, or it could retrace back to the lower gap (the one created from the last report).

The analysts seem bullish with a $99-$137 price target. If you ignore all the analysts and just focus on the price, a move above $95-$97 should push the stock well above $100.

Chris Mac · May 29, 2015

ScalperJoe said:
It popped on the last earnings report on huge volume. Also, the 437 million employee shares lock-up has expired, and a lot of these shares have probably been absorbed by the market already, given the recent price action.

As the op mentioned, that gap above $95 has not yet filled, and is acting as resistance. That gap needs to fill if BABA is going to have follow through from its last report, or it could retrace back to the lower gap (the one created from the last report).

The analysts seem bullish with a $99-$137 price target. If you ignore all the analysts and just focus on the price, a move above $95-$97 should push the stock well above $100.

Interesting post, thanks!
Analysts are always late so we can imagine a MT target well above 137 dollars if 95/97 broken.

CM

xandman · Jun 1, 2015

Shanghai is up this evening by 4%. I can't seem to find a foreign listing. BABA better move move tomorrow.

Chris Mac · Jun 1, 2015

Chris Mac said:
90 dollars, support? Maybe, a bit weak IMO, because you got an unfilled gap in May.

90 dollars is too weak : we are below.
Moreover, stochastics plead for a downside risk.
Compare circles in november 14 and now : quite the same.
if close below 88, BABA should go to 80/82.

CM

AAAintheBeltway · Jun 1, 2015

Isn't there another huge lockup expiration coming?

ScalperJoe · Jun 7, 2015

AAAintheBeltway said:
Isn't there another huge lockup expiration coming?

The employee lock up is over, however YHOO still owns a huge 15% stake in BABA worth mega billions. It entered a one year lock up last September which expires on Sept 25th, 2015.

It is unknown what YHOO plans to do with those shares when the huge lock up expires.