How To Trade Alibaba

  • Posted by on September 18th, 2014 at 7:25 pm

Over the past two weeks, I received more than ten emails asking me about Alibaba. I realize that most people in the U.S. think that Ali Baba is a hero from an old Persian fairy tale, but traders are fully aware of the Chinese Internet giant. The interest seems bigger than the interest for Twitter.

Here’s what I’ve been telling people.

If you could get a small allocation before its first trading day, get some shares and sell them near the close of the first trading day.

If you are looking for a long-term investment, I’d wait for at least one earnings report to pass and see the market reaction to it.

If we are talking about swing trade, I would not touch it for a few days. Let it settle and build some type of a base.

It will probably offer good intra-day opportunity for nimble traders. Again, you want to look for some type of a base on a 5 to 15 min time frame and buy a breakout with a stop the low of the base. 

Here’s a an example of a recent IPO – $RWLK and what to look for in $BABA, which is the symbol of Alibaba.


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