BABA's Technical Update
Big Trouble in Little Chinese Markets
Alibaba and most of the chinese equities experienced a sell-off with the rest of the world markets over the past few weeks. Chinese economic data just doesn't seem to be pleasing investors. Any stimulus measure from the chinese government is not being met with a positive reaction in the markets.
Many companies in the US and China are calling for a tough road ahead for the rest of the year, and the market is about to enter into its worst period based on seasonality trends.
Many investors think there will be more selling in the markets in the short term before a recovery. This could very well be the case with Alibaba and many other chinese equities.
Will the selling continue? Where are some possible areas of price support? Lets see the technical levels I will be watching for a potential bounce in price.
Technical Outlook
I have always said that I like this company as a very long-term investment. It has solid fundamantals and consistently produces a profit. It is like the Amazon of China, one of the worlds biggest economies. How could you go wrong with a company like this?
If you followed my previous post about BABA then you would have noticed that I mapped out the possible trajectory of BABA's price action almost perfectly. If you are a swing trader then you could have made some easy trades off of the info in the last post. You can check out the post in the link below.
In the previous post, I highlighted the possible new trending price channel. You can see this in the chart directly below.
The price action of BABA bounced between support and resistance of this channel, like clockwork.
The price of BABA is near the trending support of this price channel once again. If you are swing trading this name, then you would be watching for a bounce or a breakdown in price near this support level. If there is a breakdown in price, then I have highlighted the areas of potential price support that I will be watching.
I have also highlighted another minor, short-term support level derived from a pivot point near previous lows formed at the beginning of last month. There might be some support near this area as well.
Conclusion
BABA has been on a very long-term downtrend for quite a while now. The past year almost looks like a bottoming pattern might be forming on the charts, but there is no real way to be sure.
I like the long-term prospects for the company, but as for the short-term picture, the chinese economy needs to show signs of turning around and we need to get out of this bearish season in the markets before I can be completely confident in loading up at this historically low price for the stock.
Right now, I would just swing trade the name, buying at support and taking some profit at resistance levels. I would do this until there is a good positive catalyst for the chinese economy or the company itself. Until then, I don't see any reason to go all in just yet.
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As always, this is not investment advice. Good luck trading. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Give your investments time. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. And just follow the trends. A trend is your friend.
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SpyderCallOP : @102640653 here is a little BABA outlook
102640653 : Thanks
优喜参半 : There has been relatively little attention to Alibaba in recent years, and the popularity of society is not as popular as it used to be
102640653 : I’m waiting for a breakout of above hkd100 . The play after result did not happened. It may be before the next result announcement it might move towards hkd 105-108 . It’s just a guess. May happen or may not . All depends on market maker . Apparently results were the key to upside potential . Expect it to be soon . Alibaba results were much better than tencent this time round . Expect some big fireworks before next results announcement. Thanks. For your technical outlook . Appreciate my friend
aoimizu : Thanks for sharing. I also agree BABA is in for the long haul. However, pressure from the US is real. there are also many exciting and more nimble competitors in China appearing everyday. But with BABA's cash flow, pretty sure they're also innovating, just that we haven't seen too much of it materializing yet, since.they seem to be focused on expanding to overseas markets, which has indeed delivered results. Reshuffling at the top and reorg of their BUs all are something to look forward to. New blood, new ideas, new highs
SpyderCallOP 102640653: 100 does look like a solid breakout point. There are a small amount of holders at that price point.
If there is enough upside momentum to break above that level, then you might see some resistance there as some of the holders who feel trapped sell their investment out of exhaustion.
You might see some selling at that 100 price. So I would wait for an obvious breakout if I were to go long there.
Right now, Baba is on a nice short-term uptrend. It appears like the trajectory is headed back to 100 so far. Need to have a green week
SpyderCallOP aoimizu: I like the sound of that. Let's go BABA!
MonkeyGee : This is value input not like that Tesla guy that cut and paste all day.