Alibaba: Has the Tide Finally Turned?

NYSE:BABA   Alibaba Group Holdings Ltd.
Chinese stocks like Alibaba have been under pressure for the last 1-1/2 years, but now the tide could be turning.

The first pattern on today’s chart is the high-volume bullish gap on March 16 after officials in Beijing took a more supportive approach toward financial markets. Notice how BABA never revisited the prior lows in the two months following the jump.

Second you have the falling trendline and 50-day simple moving average ( SMA ), which the e-commerce giant appears to have broken.

Third, BABA managed to close yesterday above its $103.52 high from April 29.

So, you have a higher low in mid-May and now a higher high in early June. The stock is no longer making lower lows and lower highs. Is the downtrend finally ending?

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