Zulily Inc. - Buy Before The News And Sell The News

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

'' Zulily Inc. ZU shares are trading higher by $0.93 at $14.22 in Monday's session. It backed way off its premarket high $16.45 and is over $1.50 lower from its regular session high of $15.93. The catalyst for the rally is the is that Alibaba BABA has taken a 9.2 percent stake in the company or 11.5M shares. Interestingly, the issue had an impressive three day run ahead of the announcement following making a new low time last Wednesday at $9.09. It did rebound to end that session at $10.82. Following that session, with no relevant news out of the issue, it added another $2.48 to $13.30 by Friday's close The volume on Wednesday (17.9M),Thursday (5.8M) Friday (11.7M) and today (so far, 19M) is much heavier compared with its 20 day average 2.7M shares. In this instance, either Alibaba was a major buyer in the issue in the last few sessions or the Street got wind of the investment before today's announcement and choose to take profits on today's rally.