How an institution is preparing for Alibaba’s big rebound – Alibaba (BABA)

Alibaba Group Holding Ltd -ADR (NYSE: BABA) has been shot since October 2020 when it hit a record high of $ 319.32. The sharp drop is also due in part to poor relations between the United States and China and Chinese regulators’ crackdown on the e-commerce giant and its CEO. Jack Ma.

Since July 22, the stock’s decline has accelerated and although there have been some rebounds for the bulls, the stock has become risky due to further exits from China, when US markets are closed, which has prompted Alibaba to widen four times. . However, the gaps close 90% of the time, so it’s very likely that Alibaba will come back to close its larger gap near the $ 212 level in the future.

Alibaba hit a support level of $ 155.50 on Friday and rebounded slightly. The support level was created in 2019 and could mark the pivot point for Alibaba’s rebound.

After office hours, just before the market closed for the weekend, one or more institutions bought $ 611.71 million of Alibaba common stock. It is likely that the trader chose to buy equities rather than options to avoid weather degradation if Alibaba trades sideways or lower before rebounding to close the gaps.

See also: Are Alibaba Shares About To Bounce Back?

Why this is important: When a block trade takes place, it indicates that a hedge fund or institution has taken a position in common stocks. A block trade always involves large sizing and is typically run by a blockhouse privately and outside the free market. Because block trades do not occur in the open market, the large trade size does not create volatility in the traded stocks.

These types of buy orders are issued by institutions that buy a large number of securities and retail investors may find it useful to monitor block trades as this indicates that “smart money” has taken a position. .

BABA Technologies jobs: Below is an overview of the notable alerts, courtesy of Benzinga Pro:

• At 6:24 p.m., a trader executed a bulk trade above the demand for 1.6 million Alibaba shares at $ 160.98 a coin. The trade represented a bullish bet of $ 257.56 million.
• At 6:28 p.m., a trader executed a bulk trade above the demand for 2.2 million Alibaba shares at $ 160.98 a coin. The trade represented a bullish bet of $ 354.15 million.

BABA price action: Alibaba closed Friday’s session down 1.61% at $ 157.96.