Alibaba Breaches Major Support At $80 And Craters

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 lower by $1.43 at $79.16 in Tuesday's session. With no relevant news out on the issue, except perhaps a downgrade of Baidu by JP Morgan, the technical's can explain today's session. Since its Q4 revenue miss, the issue made several lows near the $80 level and rebounded each time with a vengeance. However, after reaching that level the last two days, it could not distance much from that major support level. In today's session, it opened flat before briefly rallying to $80.90, reversing course and heading lower with the broad market. Finally, on its fifth attempt since March 3, it caved in. A host of sell-stops may have been triggered for longs leaning on that level. In addition, short sellers seized on the opportunity of the longs bailing out and accelerated the decline. So far, its has made a new all-time low at $77.77 and rebounded into the $79 handle. The current low is still well above its original IPO of $68.