TradeWithAdam
Short

Weibo breaks down from a triangle pattern on a downgrade!

NASDAQ:WB   WEIBO CORPORATION ADR EA REPR 1 ORD SHS
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Weibo , a Chinese platform similar to Twitter , was down 13% on a downgrade (buy to neutral) from Nomura today citing slowing growth in China. In 11 years of trading, I've seen analyst actions have both huge impacts on stocks and also no impact at all on the stocks they cover. It mostly depends on the analyst's timing, who they are and their previous track record with the stock. Today's downgrade seemed to catch Nomura at a rough time as 13% is not a small decline just because someone's opinion changed.

In general I don't care so much what the analyst said, but rather the price action that followed. In the chart above we see WB managed to create a very solid base at the $54 level over the past few months. This base held through all of the turmoil of December's declines and it seems it took this downgrade today to have it smash through the support line. I believe there will be follow through.

We can sell short WB between $52.50 and 53
Target 1: $47.80
Target 2: $44
Stop: $56.25
Trade closed: stop reached: Stopped out today after it rallied off of a second downgrade. It may be re-shortable at the overhead downtrend line currently around 60.
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