From around the beginning of August, the Alibaba Group stock (NYSE: BABA) continues to mark higher lows on its chart, trading above a short-term upside support line taken from the low of August 5th. But at the same time, the share price is struggling to close above its key resistance area, at 179.90, which keeps on holding the stock down from around mid-May. Although technically, there is a good chance we may see a further push north, until we get a break and a daily close above the 179.90 barrier, we will remain careful and take a cautiously-bullish approach, at least for now.
If, eventually, we get a break and a close above the aforementioned 179.90 barrier, this could open the door to a further uprise, as more buyers could be joining into the game. Such a move may push the price above the 183.20 hurdle and target the 189.00 zone, marked by the high of May 6th. This is where the stock might initially stall, or even correct back down a bit. But if BABA remains above the 183.20 obstacle, then we could see another round of buying, which could help the price to bypass the 189.00 area and target the 191.80 level, marked by the low of May 3rd.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed scenario. The RSI has recently shifted above 50 and continues to point upwards. The MACD is also showing positive signs for the buyers, as it is once again above its trigger line, while sitting above zero and pointing higher.
Alternatively, if the price suddenly falls, breaks the upside line and slides below the 172.20 hurdle, which is the low of this week, this is when we will examine the possibility of seeing more declines in the short run. The stock could then move in the direction of the 168.15 obstacle, a break of which may set the stage for a test of the 163.80 zone, marked near the lows of August 23rd and 28th. Initially, the slide might get halted around there, but if there are still no takers at that price, BABA could resume its drift lower and aim for the 159.15 level, marked by the low of August 14th.
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