Trade Alert: China Update
Holding off on one trade and adding another.
Holding Off On Alibaba Until After Earnings
In a post a couple of weeks ago (Trade Alert: Betting On China), I posted a bullish trade on Alibaba (BABA 0.00%↑) that hadn’t filled yet. Researching it ahead of earnings this week, I got a negative (bearish) composite score:
Alibaba (BABA) (-1.7)
Social data: +23
PA Options sentiment: Bullish.
Setup rating: 7
Valuation rating: 9
F-Score: 7
Recent insider transaction(s): None in the last 12 months.
Zacks ESP: -2.39%
Zacks Ranking: 3
RSI: 55
Short Interest: 2.05%
Based on that, I’m canceling my open BABA trade, though I’m still bullish on the stock longer term. Let’s wait for a pullback (perhaps after this week’s earnings) before jumping in. Update: we did just that, placing that BABA trade on February 8th, after BABA pulled back post-earnings.
Taking A Flyer On A Tiny Chinese Stock
I’ve heard good things about X Financial ( XYF 0.00%↑ ), a profitable Chinese consumer financial company that’s trading at about 1x earnings and 0.25x book value. No options traded on it, but I put in a limit order to buy 100 shares at $3.95. At that price, it’s kind of like an options trade.
Another Earnings Trade Coming Later Today
This one looks interesting. Details later today.
The XYF trade filled at an average price of $3.94 today.