How to Play BABA Calls and Tap into Another Triple-Digit Profit Opportunity

Shah Gilani May 11, 2021

Last Tuesday, I mentioned I liked buying the MRNA June 18, 2021 $165/170 Put Spread to take advantage of what looked like an opportunity for a quick reversal in Moderna, Inc. (NasdaqGS:MRNA).

By Thursday, just two days later, shares of MRNA had dropped as much as 23%, and the MRNA June 18, 2021 $165/170 Put Spread had gained more than 400%

I sure hope you were following along!

Today, I have a new opportunity for a quick move.

In yesterday’s watchlist, I mentioned that I liked picking up shares of Alibaba Group Holding Limited (NYSE:BABA) if the stock traded down to $220.

Well, here we are.

BABA traded down to $220 during Monday’s session and I think I see another triple-digit opportunity setting up over the next 5-10 days.

In case you’re not familiar with BABA, it’s basically the Amazon of China.

Last year, the company generated $78.58 billion in net sales. This year, that number is expected to reach $110.24 billion, which would be a 40.29% increase in a single year.

That’s huge!

At $220, shares of BABA are trading at support. The stock has held its ground in the $220 and $225 range twice this year, and I think it will hold again before turning around and trading higher.

Additionally, the company is scheduled to report earnings before the bell on Thursday. I think the numbers are going to look good – and I think that could give shares the catalyst they need to move higher off support.

I like buying the BABA June 18, $225/$230 Call Spread, which is trading for $1.90 as I write this.

At the current price, this trade has a 2.63-to-1 reward-to-risk profile.

No need to be greedy here. I like exiting the trade at a 100% profit.

If you have any questions about BABA or have stocks of your own that you want to know whether to buy, sell, or hold, drop me a line!

My new email shah@totalwealthresearch.com is open to question askers from all walks of life looking for a second opinion about stocks they are interested in. Then on Friday, I’ll record my answers in the next installment of the BS.H series.

I look forward to hearing from you!

Sincerely,


Shah

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