Strategist Says There's 'No Way' He'd Short Alibaba Into Earnings

Sean Udall 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.

Quantum Trading Strategies CIO Sean Udall talked about Alibaba Group Holding Ltd BABA on the show.

Udall felt that the setup for the earnings announcement suggested going long on the stock.

There was a 75 percent chance Udall would take a long position going into the release after the stock’s recent decline and negatively perceived news stories about a hiring freeze and counterfeit goods.

Udall indicated that a Call spread might be appropriate where the cash outlay would be limited.

Over the long-term, Udall felt the stock could be held and it looked relatively cheap at current levels after a 40 point decline.

"There's no way I'd be short BABA going into this print," Udall concluded.

Alibaba Group Holding Ltd reports Q4 results Thursday before the open and heading into earnings it traded at $80.03, up 0.62 percent.

Listen to the show here: