Inverse head and shoulders pattern on 30 minute chart with high volume. consolidation between 85.00-86.20. A move with consistent volume can take BABA to 90 quickly. Point of Caution: 1) 8% move happened in one day. Time is needed for consolidation. Profit taking should occur with support from buyers. 2) P/E above 40 on a business that has a market cap of 213B+ 3) 2.23B float. Every $1 increase means BABA is worth 2.23B more, i.e., valuation can really get ahead of itself quickly. 4) Investigations in to allegedly erroneous transactions could prove harmful in the short term.
keep in mind 429 million shares unlocking on the 18th...thats' huge overhang
trdollar
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Valid point. It was priced so high in its IPO range, I'm sure there are tons of millionaires who want to dump shares. BUT, I think they'd rather dump them around 90.00 than 80.00. I wonder if any of the banks that organized the IPO will buy the stock up to 90.00 and let the 400M+ shares enter the market there. The big question is if BABA is really worth 213B or more.
mihai.mititelu
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Do you think BABA can make a new record low before March 18th? Thanks.
chartmojo
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I think the way to think about it is...there is selling pressure coming, been coming for a long time...in another 6 months 1..6 billion additional share will be come available...one cant predeict the future...but for me I look for weakness and op's to short...if it pops and goes up..great ..more for me to hit on the downturn with a tight stop...
chartmojo
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we will see...reality it 429 mil shares is SUPER GIGANTIC overhang....I mean I cant emphasize that enough in words
trdollar
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The 18th has come and gone...stock seems stable. Seems like the sell off from low 100's to 80's represented the expected overhang of ~430M shares. I like it in the low 80's for the long run.
chartmojo
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Yup....
chartmojo
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hope it rises for a few months...then I'll short it the months into the 1.6 bil share lockup exp.
chartmojo
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if you think 3-6 months out on baba and look for the cycles one can make some serious $