A specific trade setup was discussed for Alibaba Group Holding Ltd (NYSE:BABA) during Thursday’s "PreMarket Prep" broadcast based on bullish comments from a Bank Of America analyst regarding Chinese stocks.
The price action in the issue based on the setup makes it the PreMarket Prep Stock of the Day.
Alibaba Price Action This Week: Alibaba ended last week in the red by $1.62 or 1.4% at $116. The issue posted a $4.13 or 3.6% gain on Tuesday and gave back $1.01 or 0.94% on Wednesday to end the session at $119.12.
PreMarket Prep's Take On Alibaba: When the issue was being covered on the show Thursday, it was trading slightly in the green by 33 cents at $120.13, which was just above Wednesday’s high of $120.
Co-host Dennis Dick made a broad-based comment that in his opinion, the capitulatory selling in Alibaba occurred in March, when in five days it went from $100 to $73.28.
That swift decline was instigated by JPMorgan, which labeled all Chinese equities “uninvestable,” he said: “JP Morgan bottom ticked the sector.”
The Alibaba chart looks constructive, Dick said.
“It has room up to $125, and above that level you have a major breakout.”
The author of this article focused on the short-term technicals of the issue. It was noted the issue made four daily highs over the last month right at the $120 area.
If Alibaba could maintain that level off the opening, it had room in the upside to its March 23 high of $124.11. That was just under Dick’s potential breakout area of $125.
Related Link: Alibaba And Other Chinese Tech Companies Brace For More Trouble As China Declares Launch Date For Data Export Rules
BABA Price Action: The issue’s first print has held as the low for the session as of 11:30 a.m. EST at $120.63. Within 15 minutes, it breached the aforementioned high from March, paused and went on to peak at $125 before reversing course.
In midday trading, Alibaba is attempting to remain in the $123 handle.
At least one investor was able to capitalize on the bullish commentary from the broadcast:
Thanks for the Baba trade this morning D
— Harry W. Turkish (@DrunkenBanker) July 7, 2022
The discussion on Alibaba from Thursday’s "PreMarket Prep" show can be viewed here:
Alibaba co-founder Jack Ma. Photo via Shutterstock.
