Alibaba May Have Downside Risk
Chinese e-commerce giant Alibaba had a big drop about two years ago. Now, after a long period of consolidation, the bears may look to return.
The first pattern on today’s chart is the combination of the 50- and 200-day simple moving averages (SMAs). They’ve mostly drifted sideways since March. The faster SMA has attempted “Golden Crosses” above the slower SMA twice, but failed to hold. That may confirm the longer-term downtrend remains in effect.
Second, BABA peaked near $126 in July 2022 and never reclaimed that level. Lower highs occurred each subsequent half-year (in late January and late July). This differs from the performance of the Nasdaq-100, which remains above its high from the summer of last year.
Third, a triangle has formed since last October. Prices are now at risk of breaking the bottom of that pattern, which may result in a move toward the 52-week low.
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The first pattern on today’s chart is the combination of the 50- and 200-day simple moving averages (SMAs). They’ve mostly drifted sideways since March. The faster SMA has attempted “Golden Crosses” above the slower SMA twice, but failed to hold. That may confirm the longer-term downtrend remains in effect.
Second, BABA peaked near $126 in July 2022 and never reclaimed that level. Lower highs occurred each subsequent half-year (in late January and late July). This differs from the performance of the Nasdaq-100, which remains above its high from the summer of last year.
Third, a triangle has formed since last October. Prices are now at risk of breaking the bottom of that pattern, which may result in a move toward the 52-week low.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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