Why Alibaba Group Stock Looks Weak After Earnings Disappointment

Alibaba Group Holding Limited BABA group reported its first-quarter numbers Tuesday and investors were disappointed. Revenue rose by about 34% to 205.74 billion yuan ($31.8 billion). This was below estimates of 209.37 billion.

If the shares end up moving higher, there’s a good chance they run into resistance around the $210 per share level. It could keep a top on the shares.

This is because $210 was previously support. Now that the price is lower, investors who bought BABA at $210 while it was support are losing money. Many decide to sell, but they are reluctant to take a loss.

These remorseful buyers will be placing their sell orders at $210. If there are enough of them, the overhanging supply could put a top on the price.