Isn't it hard to be bullish on
BABA
these days? The stock was trading above $ 300 in October 2020, only to fall under Chinese regulators' pressure. Since then, every piece of related news has hammered attempted rallies and sent the shares lower.
The past few days have been no different, forcing
BABA
to retest the $ 230 zone. Notably, the shares are currently trading just below the pre-pandemic high of $ 231.15 set in January 2020 while testing the monthly S2 Fibonacci pivot level ($ 227.25; SM2 on the chart) as possible support. I'll be watching this region between SM2 and $ 231.14 closely. In my opinion, the pre-pandemic high may seem like a tempting entry point for those long-term investors who believe that all possible outcomes of the regulator's actions have already been priced in. Therefore, we could see the bulls pushing the stock above $ 231.14 in the next few days. In this case, I will consider the monthly S1 pivot (SM1) followed by the 20-day EMA and the yearly pivot point ($ 240.66, PY) as possible near-term resistances. However, even if this bullish scenario unfolds, BABA will have to take on a bumpy road - with several important technical hurdles ahead - until it finally can get back to the all-time highs.
On the downside, eventually losing the SM2 level will test the monthly S3 Fibonacci pivot ($ 213.26, SM3). The last time BABA hit this price range at the end of December 2020 triggered heavy-volume buybacks. Thus, upon retesting, the SM3 zone should act as solid support and offer a possible entry point for a long trade.
BABA
these days? The stock was trading above $ 300 in October 2020, only to fall under Chinese regulators' pressure. Since then, every piece of related news has hammered attempted rallies and sent the shares lower. The past few days have been no different, forcing
BABA
to retest the $ 230 zone. Notably, the shares are currently trading just below the pre-pandemic high of $ 231.15 set in January 2020 while testing the monthly S2 Fibonacci pivot level ($ 227.25; SM2 on the chart) as possible support. I'll be watching this region between SM2 and $ 231.14 closely. In my opinion, the pre-pandemic high may seem like a tempting entry point for those long-term investors who believe that all possible outcomes of the regulator's actions have already been priced in. Therefore, we could see the bulls pushing the stock above $ 231.14 in the next few days. In this case, I will consider the monthly S1 pivot (SM1) followed by the 20-day EMA and the yearly pivot point ($ 240.66, PY) as possible near-term resistances. However, even if this bullish scenario unfolds, BABA will have to take on a bumpy road - with several important technical hurdles ahead - until it finally can get back to the all-time highs. On the downside, eventually losing the SM2 level will test the monthly S3 Fibonacci pivot ($ 213.26, SM3). The last time BABA hit this price range at the end of December 2020 triggered heavy-volume buybacks. Thus, upon retesting, the SM3 zone should act as solid support and offer a possible entry point for a long trade.
DISCLAIMER: I am not a financial advisor, and my scripts are for educational purposes only. Any trades you make are at your own risk.