We are seeing very few long setups with momentum right now but some of the poor charts looks to have the risk of further downside. For that reason our Stock of the Week is a short sale of Alibaba (BABA).
BABA is known as the Amazon of China but it has been under pressure due to weakness in Asian markets and the announcement that Chairman, Jack Ma, is retiring.
BABA has often been grouped with the FAANG names but it has lost its momentum and the momentum money has flowed elsewhere. The stock looks a bit expensive at current levels with a trailing PE of 33 but growth for the fiscal year ending March 2019 of 13%.
The stock bounced last week with the broader market but we are looking for that bounce to fail and for the recent lows around $153 to be tested. We would keep a stop no higher than around $170. As always we would not chase the open for entry.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength, and will buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees and affiliates of Shark Investing, Inc. and/or principals, employees and affiliates of Shark Asset Management, Inc. ("SAMI"), directly or indirectly, controlled investment and/or trading accounts containing no positions in BABA. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.