Alibaba Shares Keep Rallying
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.
Alibaba Group Holding Ltd (NYSE: BABA) shares were trading higher by $3.30 at $94 in Thursday's session. It is in the midst of a three-day run (Tuesday's close of $88.21), which was kickstarted by the news that the IRS was examining the status of Yahoo! Inc. (NASDAQ: YHOO)'s tax-free spin-off its Alibaba stake.
On Thursday morning, Bernstein provided another boost when it initiated coverage at Outperform with a $120 price target.
The issue, which had been range-bound from $84.61 to $89.29 since its upbeat Q1 results on May 7, breached the upper-end of the range late in Wednesday's session and never looked back.
After ending Wednesday's session at $90.92, momentum players forced a higher open and with only a brief retreat to $90.92, the rally resumed.
So far, Alibaba stock has reached $94.77 and has pulled back to the $94 level. This puts the issue in a vacuum area that was created by its Q4 miss that instigated a one-day drop in price from $98.45 to $89.81. The follow through on the decline took Alibaba to a new all-time low at $77.77, two days before its surprising Q1 report.
Wednesday's rally took place on higher than average volume, but today's rally is taking place on significantly higher volume. It has traded 31 million shares compared with its 20-day average of 22.8 million shares with over two hours remaining in the session.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.