Is Alibaba About To “Pull a Twitter”?

Alibaba has been a hot name over the last month. Not only was it a hot IPO, but it’s also one of the largest public companies in the world (oh, and it’s Chinese and has a really cool co-founder). The stock has rallied over the last few weeks and now is up ~27.5% from the opening price on the IPO day. However, is it going to “pull a Twitter” here? Here’s what I mean by that.

Here’s the daily chart of $BABA right now. You can see, it broke the IPO day high and hasn’t looked back.

BABA daily













Now here’s where I kind of worry. While the recent acceleration has been on good news (beat earnings expectations), it has been fairly quick. This pattern reminded me of what Twitter ($TWTR) did a year ago.

As you see below, the pattern is very identical.














However, as we know, the bulls didn’t stay dancing for too long as soon after that $TWTR topped and has been down ever since.

Now obviously, the longer time frame you take, the more fundamentals matter. But I will be keeping my eye on Alibaba to see if it follows in the same path of Twitter.












(Disclosure: Long 1/3rd position of $BABA)

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