The meteoric rally by Chinese e-commerce giant Alibaba is about to come to an end, according to Andrew Keene of AlphaShark. And he has devised a way to cash in.
Alibaba's shares are up around 31 percent year to date, and Keene sees what he terms a "clear bull channel" on a short-term daily chart of BABA. But turning to a longer-term weekly chart, he views clouds on the horizon.
Keene sees a "double top" forming, as the stock topped out at the $120 level in November 2014 and now appears to be having a bit of trouble at $110. This pattern is often thought to show a layer of resistance, meaning the trader thinks the stock is topping out.
Just how low could Alibaba go? Keene believes $92.50 isn't out of the question by November for the online retail company thanks to earnings. That would represent a 13 percent drop.
Thursday on CNBC's "Trading Nation," Keene explained that this level "is the 50-day moving average and also where the options market makers are implying the stock can move."