OK, here’s a dose of honesty: I had no idea what WEIBO was/is until earlier today. I’ve seen massive quantities of people talking about it on sites like StockTwits, Facebook, Twitter and of course, TraderPlanet. It occurred to me that it might be an amazing time to write about it so you fine folks can read it and love it! WEIBO, ticker WB, is an IPO. It’s still pretty new, so I’m not concerned about shorting it (yet), but I do love shorting IPO’s when the possibility is there.
To make it simple for you, WEIBO (according to Wikipedia) is the Chinese equivalent of Twitter. Basically it’s a microblogging site specifically for those who speak Chinese. Coming directly from http://en.wikipedia.org/wiki/Microblogging_in_China “Sina Weibo is the most visited such site in China. Sina has used the domain name weibo.com for the service since April 2011. Because of the site’s popularity and domain name, “Weibo” is often used generically to refer to Sina Weibo. Weibos are a major source of commentary on a wide range of topics. After the high-speed Wenzhou train collision in 2011 in which 40 people died, online posting played a key role in breaking the news and serving as an outlet for expressing disapproval of the government.”
So, if this is the Chinese Twitter, guess what I’m going to analyze this like? The American/English Twitter, of course. Remember, TWTR had an ‘ok’ IPO for the first month, created a low, and then, BAM! It also had characteristics of an ugly triangle-type pattern. The main reason a lot of technical traders don’t love IPOs is because there’s not a lot of history. It’s not disciplined, hasn’t had time to show it’s movement, and the charts will not have tons of indicators because of the lack of data.
This WB chart looks pretty easy to analyze. My two perspectives are as follows: The light blue lines show some type of triangle-‘ish’ type of pattern. It’s being forced a little, but does give us perspective. The black line however, I like a lot; kind of like delicious popsicles. I would say IF WB closes above that price one could anticipate a long trade. The lowest I would place my stop is $16.00 (which ironically will be a great bearish entry in the future if it triggers.) Therefore, risk is approximately $5.00. If you want a good risk:reward ratio, your 1st target would be $30.00. Other stops to consider would be $17 and $18, but these are the tightest I would place it. Regardless of where your stop is, a target of $30 is still a solid price.
I’m interested to see how this baby moves. Keep your eyes out folks, could be interesting. Make sure you create your plan and trade it. Have a great Memorial Day weekend everyone!
