Trade of the Day
Alibaba Group Holdings Ltd (NYSE: BABA)
(Current Price: US$83.70) – TECHNICAL BUY
Buy price: US$83.70 Stop loss: US$79.00 Take profit: US$92.00
The price has broken out of a downtrend channel following a breakdown of the prior uptrend channel, forming a bullish morning star candlestick pattern on 21st March. This took place at the confluence of a 61.8% Fibonacci retracement level using a swing high of US$121.30 and swing low of US$58.01, as well as the previous horizontal support level formed in April to May last year.
The Moving Average Convergence Divergence (MACD) technical indicator also made a fresh bullish crossover with the MACD line over the Signal line, which provides a bullish signal.
We could see a retest of the resistance at US$92.00 which is confluent with a swing high formed in late February this year.
Expected timeline of the trade is 2-4 weeks from the date of report issuance.
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