Trade of the Day

Alibaba Group Holdings Ltd (NYSE: BABA)

(Current Price: US$88.71) – TECHNICAL SELL

Sell price: US$88.71     Stop loss: US$92.00    Take profit: US$80.50   

The price has broken down a bearish flag it was trading in. There were also bearish signals such as a retest of the recent horizontal support in August at US$94.50 turned resistance in September as well as a bearish crossover on the Moving Average Convergence Divergence (MACD) technical indicator. From a longer term perspective, the price has also formed a lower swing high in August compared to the swing high made in April since rebounding from the US$80.50 horizontal support level, which also displays a bearish signal.

Should the price continue its bearish momentum, it could retest the support level at US$80.50 which has acted as a horizontal support level from March to June.

Expected timeline of the trade is 4 weeks from the date of report issuance.