ALIBABA STAYS BELOW A DOWNSIDE RESISTANCE LINE

Alibaba is China's — and by some measures, the world's — biggest online commerce company. Its three main sites — Taobao, Tmall and Alibaba.com — have hundreds of millions of users, and host millions of merchants and businesses. Alibaba handles more business than any other e-commerce company.

The Alibaba stock (NYSE: BABA) traded quietly the last few days, staying slightly above the 152.50 support zone, marked by the low of August 23rd. Overall though, it stays below the downside resistance line drawn from the peak of October 27th, 2020, and thus, we would consider the bigger picture to be negative.

Alibaba stock may return somehow, but even if does so, it could reach high resistance close to the aforementioned downside resistance line. And this can probably result in another turn of selling, and another test near the low of October 4th, at 137.95. But if there is no interest in the stock, even at that price, then a dip lower could challenge the 129.45 zone, which give support back on October 30th, December 24th, 2018, and January 3rd, 2019. Also another break, below 129.45, could carry more bearish implications and perhaps observe scope for declines towards the low of May 18th, 2017, at114.25. It can also be observed fr the daily oscillators, that the RSI, even though slightly below 50, has turned up again, while the MACD stays below both its zero and trigger lines. Each of the indicators detect negative momentum, but since the the RSI was found to turned up adds to the idea of a small bounce in the short run before the next negative leg.

To begins inspecting the potential positive reversal, we nee to observe a break above the 183.00 zone, leveled by the high of October 19th. And This will not only confirm the next coming higher high, but also the break above the downside line taken from the peak of October 27th, 2020. We may also expect the next stop to be the high of August 4th, at 203.75, the break of which could allow expansion towards the 230.55 zone, which provided resistance between June 25th and July 1st.