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BABA MOMENTUM POSITIVE

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Weekly Chart - BABA

I am taking an interest in BABA here. It has been in a steep correction for well over a year and appears to have made a bullish wedge. What really has my attention is not only the price breakout above but also the momentum break. I may leave myself a little room and time here but I personally may take a heavier interest if it stays this cheap or drags sideways.

These patterns are great for trading the spikes but there are no guarantees. It's not uncommon to see a large spike up (15-30%) only to correct and go nowhere for weeks or months. A breakout does not guarantee profit.. but for me the reward outweighs the risk in this zone.

Let's see what happens.

注释

I cloned the lower pink line to make a parallel channel just as a possible resistance zone. So while the wedge appears bullish, I want to see if this parallel channel (which is not confirmed) has any effect. Otherwise I am willing to nibble. If we linger or correct for another week or two then I might nibble more. We'll see.

注释

DPMI (Decision Point Momentum) on weekly

注释

b.e.a.u.t.f.u.l. !

注释

I mean b.e.a.u.t.i.f.u.l !

Now listen up. Seriously. I've done this a while and I can see right through this. I bought call options on BABA below 90 before it had that nice spike. I picked an expiration way out so the decay curve wouldn't rob me (or whoever it is that's selling them). They did very well and I made the decision to take profit on 80% of the entire position. I needed the leverage elsewhere at the time and I thought it would be wise to leave some on the table if the train left the station. My fears were correct as it's gone down that last few weeks. What I'm seeing now is another very terrific opportunity. This is my opinion. If you follow me you've heard me say this because I have found it to work. Options are very powerful and offer incredible leverage. But most people will lose on them because they underestimate the decay. Everything I am seeing on BABA looks incredible but it's a trade that must be done slowly and carefully. I am going to allow myself several weeks (or longer) to accumulate with a reasonable strike but especially with an expiry that's way out. There is a high likelihood baba is significantly higher over the coming year. But what I cannot see or know is how long it's allowed to dribble down and go nowhere. I am not interested in fighting against decay. So I will move slowly I will move carefully. I will be very very patient.

Don't build your house without first building a strong foundation. Don't get in a hurry.. do it right. If baba takes off like a rocket very soon then that would be great. But I will trade with the mindset that maybe it could be weeks or months of bottoming.