I may seem that Alibaba might be back for good. After long term market manipulation to the downside which "concluded" to a 30% drop from $120/share to $77.77. The stock has surged back up 6% thus far today. Yes the numbers from Q1 2015 were good and revenue was up 45%. At the end of the day we have to be logical and understand there are other forces at play when a company that sold $11billion in one day is trading 5x less than Amazon, and the said company is Amazon 2.0. Mutual Funds and big investors of the are settling themselves in at a great price before the Big Bang! Looking at the chart other than a few instances of high vol
which took the price down. There has been divergence between price and vol
. the price has moved down on relatively week vol
. Today seems to mark the exhaustion point for the sellers as you can see by the arc and strong correlation of high vol
and increasing price.
The last time BABA had vol
about 16m was 1/29/15 when the price gaped down from $98 t0 $89. Since then vol
ha be relatively nominal till today's explosion of 18m+.
Confirmation is key in these markets when you are not one to delve in Primary price discovery. There will be some volatility
in the near term yet as long as we don't return to filling the gap at $80 - $82 Baba should be ready to soar back above $92.36 easily.
We'll need to close above today's close two days in a row before we can truly breath a sigh of relief.