1/11/2022
Did you hear the news?
Billionaire Jack Ma was ousted from his position as controller of Ant Group (a company he founded) as his stake in the company was diluted down and another board member joined…
…not necessarily what Ma may have wanted.
Here’s a live look from the Ant Group offices:
This being the case, Alibaba Group Holdings Ltd. (BABA) has gotten a major boost in its share price.
(If you recall, this is one of my favorite companies.)
Is it overextended? Maybe…
Let’s get a look at the daily chart:
“I wouldn’t invest in China” has been the cool thing to say for the past year, but in the case of BABA, that stopped being true in October.
And with potentially easing restrictions on China’s tech giants and COVID-19 policies, the stock has been roaring.
However, it could be time for a breather as the chart above is nearing historical stopping areas…
The movement has blistered through a previous Resistance level at ~$110.00, now turning it into local Support.
One thing worth noting about the concept of Support and Resistance is that they’re typically good for a limited time only…
The reason I point this out is that they’re more notable in terms of moving between levels.
In other words, if it breaks above a previous area of trouble and holds, you can stick with the probabilities and trade to the long side and vice versa.
Now, note that I’ve marked the next likely stopping point — call it ~$121.00.
The stock has space to run, but there’s also a gap I’ve drawn in extending from July of last year…
Trading into $121.00 or so would fill that gap and there’s a high chance you’ll meet sellers (or bagholders) ready to offload their shares to find a better entry, potentially around that $110.00 mark I mentioned above.
The green-to-red step line you see on the price chart shows the uptrend is still intact as do the TTM Squeeze and Modified Triple Stochastic when looking at the lower chart…
The latter is something that I’ve been working on for some time with the help of a coder. But the gist of it is combining multiple Stochastics and an averaged RSI (Relative Strength Index) to get multiple entry points and early signals.
(Note the pointed out divergence as well as the cross above the midline.)
I’m watching closely with alerts set at Resistance…
If BABA gives the signal, I like it for a near-term short trade.
Keep moving,
(Disclosure: I am long BABA.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
