Shorting Alibaba short term due to Price vs ADL divergence

NYSE:BABA   Alibaba Group Holdings Ltd.
The Entry
  • I wanted to enter on the 24 Sep, but was apprehensive as price was not near the resistance line.
  • On the 25 Sep just around the open at 9.30am I realise that the price was near the resistance line and so I entered.
  • I wonder if I should have waited till 11am where the market open rush would have normalised.

    The Situation
  • I think price will go down because of the divergence in ADL & Price. Which means that price (11 Sep - 21 Sep) was moving up despite there being more sellers.
  • It also seems like a good point as it is testing a previous support that is the 0.7 Fib.

  • RSI is not overbought territory.

    External factors
  • This upside divergence in my POV is probably short term as it was driven by last week's easing sentiment towards the trade wars.
Comment: Trade hit the price that was 50% of my reward. As such I adjusted my SL to be tighter at 167.68 because if the price reverses and hit's this point. It would mean that the situation has changed and my original trade agenda would not longer be valid.
Comment: Trade seems to be moving my way, to let my winners ride I have made the following adjustments.

- I have moved my trade SL to 161.501 which means I book in a 1.2k profit if price hits my SL
- I entered a second trade at 154.989 with the same number of units as the first but with a SL of 1.2k. If price hits this SL, it would mean I net out with my profit from trade 1.
- However if price breaks 152.82 (current support) I see it going lower

External Factors
- This aligns with the negative sentiment of CN stocks due to the current CN hacking through the server micro chips. I think Trump might attempt to strike back as it impacts his image as we head into the mid terms.
Comment: As we have broken the previous low of 153, I have made the following adjustments
- Moved my SL for trade 1 and 2 to 158
- Entered a 3rd trade with a SL of 158, but to ensure a similar risk to my 2nd trade, I have sold only a 100units
- Overall with all 3 trades combined I am currently freerolling with no risk and a small $300 profit
Comment: Comment: As we have hit 138.1 yesterday, I have made the following adjustments
- All Trade SL have been moved to 158.82. If price reaches here it would be a clear reversal.
- I am now freerolling with profit. yay!
Trade closed manually: Got out with a sweet profit as the agenda for the market seems to be changing. Especially with the Chinese government's support and intervention.

President Xi Jinping vowed "unwavering" support for non-state firms, while the country's stock exchanges committed to help manage share-pledge risks. China also released its widely-expected plan to cut personal income taxes after data showed the nation's economy grew at the slowest pace since 2009.
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