Is it too late to shop at Alibaba (BABA)? (May 21, 2015)
Alibaba ( NYSE:BABA ), look at it over the last three days, this is one that I’ve been talking about in the “Strategy Sessions” for the last few days. I forget exactly when I got on to it, it might have been here but for all I know, it could have been there too; I just call them like I see them. But the stock had been trending in a sideways range after this big breakout. And this, by the way, is why it doesn’t pay to buy right after earnings are reported.
Because typically the only people that are rushing to get in the front of the line to buy right after earnings are reported, and they’re really good, the only people that are rushing to get in line are the last people you want to be on the same side of the trade with. You want to trade with them, like, “Hey! You want to buy it? Fine I’ll sell it.” So that’s what happened here. Well look what happened, the stock really though, that was still a pretty nice move from about $80.00 up to 86.00, I’ll take that any day. But you didn’t get paid if you bought right at the open; it’s taken several days for you to get paid off.
Now, if you were one of the poor folks who bought there you probably also sold here on Tuesday, or something. What I’m saying is this, you want to be trading with the trend, but not when it gets to be an extreme, and a big jump from here to here, that was an extreme, 11 percent. Now this is a different deal, the stock is starting to fill this gap from back here at about 92.00, and I would say the rest of the gap, 96.00 or so, something like that.
What I’m saying is, if you’re late in buying this stock, if you’re buying this stock now you are late, there’s no question about it. But are you too late? I don’t think you are as long as you realize, and I’ll say it again, you are late, and when I say are you too late, what I’m asking really is, is the stock going to fall? No. This has a long base, at least for a stock that’s only been trading for what, how long, less than a year. This has a really wide base, now it’s starting to move higher.
I would forget about all this resistance up here, just forget about all this stuff. Because there’s been so much trading happening between when this poor guy bought here, looking for the dip, and then is ultimately getting crushed when it’s down here. There’s been so much trading going on that you really don’t have a lot of I want my money back traders up at these levels, because they’ve all sold here. Or they’ve just decided, you know what, I’m going to hang on, I’m a long-term holder.
But the stock is now trending higher. Gosh, what about the 200-day moving average? Where is it in relation to the 200-day moving average? Well, guess what? It hasn’t been trading for 200-days, so all we have to go on is the 50. Oh, you can use the 150 if you want, the 100, but do we really need to get that micro? I say this; the stock had been bumping up against the 50-day moving average after it broke out here on volume. It took a little while to get it’s footing, but this is the way I want you to think about it, seriously, have I been talking about Alibaba ( NYSE:BABA ) here?
No, not at all, I was bashing on it here and I forget what I was saying here. But when the stock starts drifting sideways just think like a trader. Do I really care about this? I really don’t care, not when it’s drifting sideways I’m not an Alibaba ( NYSE:BABA ) fan, I think I made some money here, but generally speaking I’ve left this stock alone because it seems like an Amazon for counterfeiters.
But now, after the stock has gapped up and it’s starting to move higher again, guys like me are taking a look at it. I’m not the only guy that sees that and I’m not the only guy that looks at this and says, “Hey, you know what? I think I kind of want to buy this before it gets back to $120.00 and breaks through to a new high”, which I’m pretty sure, I don’t know, over the next several months, it’s probably going to do just that.
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