Carter Worth's Technical Analysis: Trim Long Alibaba Positions

Alibaba's Recent Rally and Technical Outlook

• 📈 Alibaba's stock has rallied over 7% this week, reaching nearly four-year highs, partly driven by reports of a major customer signing for its AI chips.
• 💡 Carter Worth of Worth Charting previously advised clients on August 12th to play a potential move out of an apex formation, comparing it to a coiled spring.

Strategy for Existing Long Positions

• 🎯 The stock has since moved out of that formation with a significant advance of 36% in five weeks, outperforming the K Web and FXI.
• 💰 Worth suggests trimming one-third to one-half of long positions to take some profits, while letting the balance ride or selling calls.
• 📞 Selling October 180 calls for $5 allows participation in further upside, potentially an additional 8-12% gain including the premium received.
• ⚠️ The advice stems from the observation of a steep, uncorrected day-to-day and week-over-week advance, indicating a time to "take some measures."