Dan Zanger Sees Opportunity To Sell Alibaba

Dan Zanger was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

ChartPattern.com Founder Dan Zanger told Benzinga's #PreMarket Prep that there is still opportunity to sell Alibaba Group Holding Ltd BABA with the stock breaking "serious support" at $78. While Alibaba was rebounding 2.5 percent on Thursday, the stock is down more than 4 percent this week.

Much of that move came after the company reported earnings on Wednesday, which showed that the Chinese retailer had its slowest growth in three years.

But Zanger pointed out that there are also macro factors that may be pressuring Alibaba lower. This is an "opportunity to sell," he said.

Alibaba is in no man's territory after falling to an all-time low. The stock IPO'd at $68, so one might expect to see support there. In fact, after hitting $71.03 on Wednesday, the price has rebounded 6 percent off the lows. However, Zanger said that the stock could ultimately fall to $60 if pressure builds. He added that the chart has broken a decent pattern.

On the overall market, Zanger said that he prefers to stay on the sidelines, leaving much of his portfolio in cash.

Alibaba has shed nearly 28 percent year-to-date. Most of Wall Street remains bullish on the stock, despite near-term headwinds.