+100% on BABA Put
by Mike Paulenoff
November 12, 2015 • 9:47 PM EST
Last Friday (Nov 6), Mike added a put option on Alibaba Group Holding Limited (BABA), noting that the stock's Nov 5 recovery high at 86.42 looked like a failed upside breakout from its post-Oct 27 rising wedge formation.
Mike called for a correction pointing to 80-78.50 initially, and entered the Nov 27 85.00 Put at 3.10 to play the expected downside.
By Wednesday the stock hit an intraday low of 78.12, prompting Mike to exit his put at 6.40, or more than double the entry price.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
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More Top Calls From Mike
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AMZN is one name that pops out at me that should benefit from an initial and sustained correction in traditional energy and transportation costs. AMZN needs to climb above and sustain 110 for my work to generate a more confident technical signal, otherwise, I cannot rule out another loop down that tests and breaks key May-June support at 101.26 to 101.
Last Wednesday, prior to the official FOMC rate hike of 75 bps, Mike Paulenoffwarned MPTrader members about the likelihood of additional weakness in the beleaguered home builders, writing about the ITB (iShares US Home Construction ETF):
In that, neither my pattern work nor my intermediate-term Momentum gauges offer much technical confidence that ITB will be able to carve out a meaningful corrective basing area in and around 53.
Back on May 13, amid a thrust in the price of Crude Oil from $95/bbl to $112/bbl, Mike Paulenoff alerted MPTrader members to an actionable technical setup in energy producer PSX (Phillips 66), writing:
My work has been extremely friendly since the beginning of May, looking for PSX to break out of its 11-month corrective accumulation pattern that will trigger a thrust towards a potential target zone of 110-115.
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For the past 5 months, we could make the technical argument that PARA has carved out an accumulation-base formation that attracts buyers every time the stock dips beneath 29.00. We can also make the case that every time the stock climbs above 36.
On March 11, with AAPL in a month-long down-leg and trading at 156.34, Mike Paulenoff posted a relatively bullish analysis for MPTrader members, writing:
I am watching AAPL more closely than usual these days, as a bellwether for the health/vulnerability of the overall market.
