Exclusive: This Trader Explains What Alibaba's Stock Needs To No Longer Be A Gamble

Serge Berger was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.

The Steady Trader’s Head Trader and Investment Strategist Serge Berger was on Benzinga’s #PreMarket Prep morning show on Thursday. Amongst several topics and stocks, including GoPro Inc’s GPRO, the trader talked about Alibaba Group Holding Ltd BABA and its stock.
Shares of Alibaba are slowly recuperating, after plummeting more than 21 percent in the last three months. They are now trading slightly below the $86 level.
On Wednesday, a lock-up period expired, and insiders owning a total of 337 million Alibaba shares are now allowed to sell them. Another lock-up expiring in May will allow the sale of an extra 100 million shares owned by employees. An even larger lock-up of more than a billion shares held by insiders, including Yahoo! Inc. YHOO, expires in September.
A Reuters article explains that “some investors are worrying about further drops in the stock as insiders sell.”

Now, Berger sees one question as crucial: will the stock break above $86?

“On that beautiful rally day (…) the 4th of March, I actually posted something on Benzinga on the significance of that day. And I think you actually mentioned Jay-Z before; he mentioned that as well at some point. And I think that was, for me, price-action point of view, an important day.”
“Now, it doesn’t mean you immediately see follow-through breakout… you can see a recess from the lows (…) but it hasn’t fallen apart, even after yesterday’s lock-up. So, to me, that still puts a lot of significance on that big monster rally day.”
Bottom line, Berger thinks the stock needs to get above $86. “As long as it doesn’t get above $86 –unless you are day trading- it’s a gamble.”