Stock Of The Day: Will A 'Crowded Trade' Force Alibaba Lower?

Core Viewpoint - Alibaba Group Holding Limited (BABA) shares are slightly down ahead of its earnings report, with a scheduled conference call to discuss results [1] - Despite potential good earnings, the stock may decline due to a crowded trade scenario, where most investors have already purchased shares in anticipation [2][3] Group 1: Earnings and Market Sentiment - Analysts have noted a 60% rally in BABA shares over a few weeks, driven by optimism surrounding AI advancements [1] - A crowded trade could lead to a lack of buyers post-earnings, potentially pushing the stock price lower even if earnings exceed expectations [2][3] Group 2: Technical Analysis - BABA is currently considered extremely overbought, trading above its typical range, which may lead to a reversion to the mean [5][6] - The stock is testing a resistance level around $124.00, where previous encounters have resulted in selloffs [6][7] - Excessive optimism, overbought conditions, and resistance levels suggest that BABA may face downward pressure, regardless of positive earnings [7]