Loading...
by Darius Anucauskas

Is It Time for Alibaba To Recover Some of The Losses?

Since mid-June, Alibaba (NYSE: BABA) has been on a steady decline, trading within a falling channel. But finally, a couple of weeks ago, the share price managed to exit that pattern through the upper side of it and continues to remain above it. It looks like that the stock could be picking up interest from investors again, which could lead the price higher. It is trading above a short-term tentative upside line, which adds another positive spin on the near-term outlook.

In order to fully get comfortable with the upside, we would wait for a break above the 157.40 barrier, which was the high of the 15th of November. This way, a break would confirm a forthcoming higher high and Alibaba could travel up to test the 164.50 obstacle, marked by the high of the 3rd of October. Certainly, if the buying-interest stays on, a further push higher could lift the stock towards the 169.00 barrier, which was the high of the 21st of September.

Looking at our oscillators, the RSI and the MACD are both somewhat in support of the above scenario. The RSI, after bottoming on the 30th of October, has now shifted slightly above the 50 mark, which could be seen as positive, even though the indicator, at the time of this analysis, is a bit flat. The MACD is still having a good run higher from its October lows and now has overcome the 0 line.

Alternatively, if the stock fails to move above the previously-mentioned 157.40 level and then gets back inside the falling channel formation, this could be a sign of worry for the bulls. If the stock then drops below the 138.50 hurdle, marked by the low of the 1st of November, this could invite more sellers and the price might fall further towards the 130.00-dollar tag line, which was the lowest point of October. This is where Alibaba shares could stall for a while, until the bulls and the bears decide once again, who takes the driver’s seat from there.

Alibaba daily

Disclaimer:

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.

FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.

Copyright 2018 JFD Brokers Ltd.

 

WEEKLY FINANCIAL NEWSLETTER
RIGHT INTO YOUR MAILBOX!
SUBSCRIBE TO JFD'S STRATEGIC REPORT