Just a quick post on a potential opportunity with Alibaba ( BABA ). The stock rallied hard from its IPO around the $60 range to $120 then sold off back to $80 before spiking after the recent earnings report. From a technical analysis point of view, it feels like this thing is going to run to $100 and way beyond in the much longer term. I’ve been accumulating long term options along the way which have already done really well but i think there is a good risk / reward play here.
Here is a daily chart with some highlighted support/resistance points.
As we’re approaching the summer, the market may trend sideways, may have a correction, may rip higher, nobody knows and there are plenty of arguments for all cases. I’ve hedged my portfolio with some SPY puts when the VIX took a dive on friday…..usually a prudent move if the VIX goes sub-13…..
So my take on this is the following, if BABA sells off back down to $80 or upper $70 in a vicious market sell-off – i will be loading the boat! This is just like Apple ( AAPL ) in my eyes, buying ahead of a big catalyst which in this case is the Singles’ day in China ( November 11th ). The premiums should build up into this over time making the options contracts even more valuable. Looking to exit around $100-$105 for a short to medium play. I may do this on an annual basis like i do with Apple ( AAPL ).
As for the rest of my portfolio and dividends, it looks like my May income is coming in roughly around May 2014 values which is no bad thing. Things should start to accelerate over the next few months as I bought a bunch of stock over the last few weeks.
Have a great weekend.