Technical Pulse: Alibaba Group Holdings Ltd June 22, 2020 628

Alibaba Group (US: BABA) has entered into a 3-3-5 regular flat corrective formation and based on the technicals, the stock will be entering into a series of bearish 5-sub waves.

  1. The larger rising wedge formation from 23rd March to 19th June indicate a potential reversal of the bear due to the consolidation converging pattern, signalling a loss of momentum.  
  2. The latest strong bearish marobozu candle rejecting the 90% of wave A, indicate a potential start of the 1st sub-wave of C.
  3. Relative Strength Index indicates a bearish divergence, indicating the momentum is losing for the bull.

 

*The technical call is valid for 2 weeks only.

* Should Alibaba reverse and break the resistance level of 230.00, the next level to be tested is 127.2% of wave A at 247.29

 

CHART LEGENDS

Moving average

Red dotted line = 200 day period moving average

Blue dotted line = 50 day period moving average

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