Alibaba (US: GS) had a strong start into January 2020, where prices closed above historical high of 230. However, Alibaba begin to see an incoming bear when the rebound on 27^th January failed to close above 225.00. Based on the technicals, Alibaba will continue to fall further. 

1. The 5-wave broadening wedge formation has complete wave D, and the next sub-wave movement will be the last leg of wave E. Current sub-wave suggests that the price will fall further to complete the last leg of wave E.
2. The D wave has also tested the 216 resistance level, which confluences with the 3^rd leg of the top of wave B.
3. The formation of a bearish engulfing candle at key Fibonacci retracement level of 61.8%, which is the key retracement level of the 1^st leg of wave E.
4. First target price will be at 161.8% expansion level of the 1^st leg of wave E.

*The technical call is valid for 3 weeks only.

*Should price breaks above the invalidation level of 222.50, the whole wedge formation will be invalidated and price may continue to 240, breaking the previous high of 230.00

CHART LEGENDS

Moving average

Red line = 200 SMA Line

Blue line = 50 SMA Line