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Don’t buy yet – these stocks have further to fall

Alibaba (BABA)

Fallen: 8%                   Consider buying after: 15%

I was a big fan of Alibaba before its recent price-spike. You may remember that it was less than a month ago that I bought BABA call options, and shared the trade with my readers. I’m not going to dwell on this, but if you followed me on that trade, you are probably trading stock today from Costa Rica (as I am) or some other tropical paradise. I don’t necessarily recommend waiting until BABA shares fall back to their pre-spike level before buying them, as they may never do so, but given the two-steps-forward-one-step-back pattern of this stock, I think you’ll very likely be able to grab it at $130 or below.

BABA

Chart courtesy of www.stockcharts.com

Symbols: , , , ,

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.