Investors Warming Up To Alibaba's Snapchat Investment

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Alibaba Group Holding Ltd BABA shares were trading higher by $2.13 at $83.99 in Monday's session. This could be a delayed reaction to the company's $200 million investment of Snapchat last week.

Despite a muted reaction on Friday, investors may be re-evaluating the possible synergies between the two companies moving forward. A Morningstar analyst commented that the acquisition of Snapchat could lead to future enhancements in its current mobile platform.

After posting three consecutive closes at the $82.00 level, it immediately found support at $81.94 and exploded to the upside before finding resistance at $85.20. That level is shy of the three consecutive highs (March 4-6) the issue posted near the $86.00 level, with $86.27 being its level reached since making its all-time low on March 4 at $80.03.

Related Link: How Would The Alibaba-Snapchat Deal Impact Both Companies?

Another positive for Alibaba is that it has been able to hold steady ahead of March 18 lock-up expiration, when a majority of trading restrictions will be removed for corporate insiders and large investors.

In the past, issues such Facebook and Twitter have wilted ahead of their lock-up expirations.