BABA: Bearish signals on chart, despite local enthusiasm

NYSE:BABA   Alibaba Group Holdings Ltd.
Alibaba has an interesting chart, where we can observe many bearish signals, that might be a bit hidden to the untrained eye.
To name a few:
  • Yearly MA is trending down and price is below it
  • Price is currently under the most frequent price since day 1. This implies the downside is more probable to begin with.
  • The earnings have increased midly but it's possible that this isn't the result of an increase in profitability, but debt.
  • We have a couple trendlines suggesting weakness, since the daily uptrend was broken. We might see a lower high or M top form here.
  • Relative strength readings aren't good for BABA.
So, in conclusion I'd be looking for shorts once we get a clear technical signal on chart.
There's a daily uptrend that has 1 day left and has hit the target, this might be the perfect excuse to short it prematurely before a downtrend clearly forms. I'll update the chart with an entry once ready.

Good luck,

Ivan Labrie
Comment: Range expansion up day, perhaps ignited by the IMF news (they will be including the Yuan in the SDR basket)
Price right below the main resistance. If it breaks up it migh signal an interesting long.
Comment: Monitoring, not 100% clear yet. We're inching above resistance.
Comment: I had shorted 83.69, stop 85.15 and covered.
Looking at earnings key levels below for support:
I might open a long position, will update the chart then.
Comment: I went long at 80.55 today.
I'll add to it tomorrow if price action justifies it.
It's possible to see a rally over the resistance soon. Target is 95-105.
Added to long at 82.34, long working well.
Booked partially, and trailed sl to 83.33.
Comment: (Was stopped in profit, then stopped in a second long)
Currently in short.
My initially forecasted general path was respected, just that it took a bit longer to resolve.
Trade closed manually: Covered short.
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The bold trade was to short on Thursday when it failed to follow through with the 3 point range expansion from Monday that started from 77.87 and when the 5th day of the 5-day mode rally had also expired. It was just over 30 cents from the target and the downside targets at 78.22 (5-day mode) and 77.87 was far away. Excellent catch. If we have more eyes on charts like this, we can catch these trade setups. Nice work Ivan!
+3 Reply
Great job.. well done
+1 Reply
IvanLabrie themarketzone
Thanks mate. :)
well done !
+1 Reply
Hi, is it the time to short it now?
IvanLabrie KholleKhokk
In one day we could look for shorts. Depends on the price action.
Clearly resistance held.
gLloWaves IvanLabrie
I have been wanting to get into this stock as a longer term hold, but I am waiting for a pullback... too many bearish divergences... not being able to break the current resistance for the last month... and a Daily Wavetrend that is on the brink of turning downward. all of these things make me think we're going to get a retracement, so I'll wait for that. btw, thanks for all of your analysis.
IvanLabrie gLloWaves
Yes, retracement is the minimum I expect.
It is completing a cup and handle pattern, very bullish.
IvanLabrie Eightian
Or not...what's the success rate of those patterns and how to objectively define them 100% of the time the same way?
I don't use anything I can't objectively repeat and verify.
If it breaks above the red line it might surge up though.
+2 Reply
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