BABA Forecast + Trading Strategies


Bullish Case: Alibaba is set to recover due to robust AI and cloud investments, alongside improved consumer sentiment from China’s economic stimulus. The upcoming free shipping program for Taobao further enhances market competitiveness, potentially increasing sales volumes significantly in international markets.


Bearish Case: Challenges persist from regulatory scrutiny and fierce competition, especially amid slowing domestic growth. The high implied volatility indicates significant market uncertainty, which could lead to further selling pressure and reduced investor confidence.


Potential Outcomes:

1. Strong economic recovery in China boosts Alibaba’s sales (60%);

2. Regulatory challenges remain, limiting operational effectiveness (30%);

3. Increased competition from rivals like Pinduoduo affects market share (10%).


Trading Oracle: Adopt a bullish debit spread strategy, targeting the $77/$80 call strikes for expiration in August. This leverages current high implied volatility while balancing potential rewards with risk. Target near-term resistance levels for maximum upside as AI growth narratives unfold.


July 25, 2024


Alibaba Forecast

BABA      Alibaba











Correlated Assets

Assets that tend to move strongly with BABA



LI Forecast + Options Trading Strategies   LI  Li Auto (0.47)


VFC Forecast + Options Trading Strategies   VFC  VF (0.37)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.12)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.42)



Uncorrelated Assets

Assets with little price relationship to BABA



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.12)


VFC Forecast + Options Trading Strategies   VFC  VF (0.37)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.42)


LI Forecast + Options Trading Strategies   LI  Li Auto (0.47)



Anticorrelated Assets

Assets that tend to move strongly against BABA



LI Forecast + Options Trading Strategies   LI  Li Auto (0.47)


VFC Forecast + Options Trading Strategies   VFC  VF (0.37)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.12)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (-0.42)





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