Alibaba Group Holding Ltd. (NYSE: BABA) Shares were bullish on Stocktwits on Monday, and shares are trading low on the session.
Technical levels of Alibaba to be observed: The short 5-minute chart above shows that the stock is trading on a channel.
The top of the channel is close to the $ 242 level and the bottom is close to $ 226. These areas have not been broken previously.
Monday morning’s shares trade below the VWAP (pink) and the moving average 200 (blue). These areas can also remain as short-term resistance until the price is able to break above.
If the price falls above these levels, they can be considered as short-term support.
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Analysis of the Alibaba daily chart: The daily chart above shows that the stock has been on a general bearish trend for the past three months. This can be shown by connecting the graph’s maxims and noting that the slope of the line is negative. The chart also shows a potential bounce area close to the $ 225 area.
Another potential area of resistance on the daily chart is the 200-day moving average; this area fluctuates depending on previous prices. The average is $ 260 on Monday, but it will change over time. A break can cause the average to become support.
Optimistic technical traders would like to see the stock take a “double bottom” pattern and rise back to resistance. A break in the downline connected by previous highs can cause the stock to start trending upwards.
For a bearish technical trader, this is a “descending triangle pattern”, where the stock goes down to a support level and price consolidation until it is compressed at the support level and falls, usually with a strong movement after support is broken.
Alibaba is being traded with a market capitalization of $ 651 billion on Monday.
BABA price action: Alibaba’s shares fell 3.61% to $ 27.38 on the last check on Monday.
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