$Alibaba(BABA.US)$ hematemesis

$KraneShares CSI China Internet ETF(KWEB.US)$ $Alibaba(BABA.US)$
I will show some of my technical analysis that I have been doing on KWEB and also BABA.
BABA has been falling non stop from the start of the year and investors still do not know whether this current price is the bottom yet. KWEB the china internet ETF which holds about 50+ holdings mainly the big china tech stocks has always similarly suffered the sell off ever since the start of the year.
BABA has lost about 65% and KWEB about 62%. Both stocks are in bear market territory. If anyone were to tell you this 2 stocks could drop to current valuation last year, nobody would have even taken you seriously. However now that we have seen how a prices can drop 60% in a span of a year, people are starting to wonder when will this fall stop. However, we all know, stocks do not only go 1 direction. There will always be pullback and retracement from the overall trend. This is when swing trades are set up for good risk to reward ratio.
BABA
BABA experienced huge sell off after earnings miss on the 18th Nov and has been free falling ever since. Even long term bulls of alibaba around me have started to get worried about whether the bottom is in yet. When BABA had a huge sell off after earnings miss, the fall did slow down and this are early signals of the selling pressure weakening. However due to low volume, it does also show there wasn't much buyers at those levels. It even broke through the 129 key support pretty easily which was the US China trade war lows.
However last friday, the signal was in for an incoming technical rebound after there was huge volume coming in yet it failed to break the key support of 108. Wick of candle is about 39% to the spread of the candle. This is usually a good sign that buyers are entering and supply is getting low. Which means a upside swing will be in motion soon. Currently as of the time of this post, HK BABA does seem to be rebounding and this are early signs for us on what is about to happen on the US market later on cash open.
However, this upside swing does not guarantee any overall trend reversal and can only be a short term swing. Thus do take note of the resistance levels to know your entry and exit points.
KWEB
Lastly onto KWEB, it has been in a consolidating trend since late july after it broke the 60 and 55 support in a huge sell off due to tech clampdown. My fibonacci level for a buy entry was at the 39 point. It was a long wait as I did thought we would go down quite soon after hitting 43 lows. However with the consolidation that happened over the few months hovering above 43 and below 55. It was looking more like an accumulation phase. Thus meaning 2 things, either a break up of the wedge to transit towards the mark up phase, or a break down of the wedge to activate the ''Spring'' before the mark up phase. Springs are usually a false break down to catch the stop losses of traders and shake out the final batch of people who are waiting to cut loss should it break the previous lows.
It broke down the wedge on 26th Nov and that was when I mentioned to keep a lookout on the 39 price point as it will very likely rebound there. If it rebounds off 36-39 price point and breaks back into the 43.40, we could very likely start to see the transition towards mark up phase. Similarly large volume day on friday with a rebound off the 39 key support level which was COVID sell off lows. Wick to spread is 45% and this is a huge signal of an incoming rebound due to lack of supply or demand overpowering supply. We call this the selling climax. This is a good set up for a swing to the upside.
Keep a look out on the resistance levels above to see if it does break back above to have a confirmation of the accumulation phase coming to an end and the transition to the mark up phase. If it doesnt break back above 43.40, this could mean the china internet stocks are not yet ready for a reversal of trend and could still see a lower bottom.
As always, trade safe & invest wise!