Alibaba Group Holding Limited (BABA) has climbed sharply and hurdled key resistance at 82.20 to 83.60, which has improved its near-term technical set-up, and points BABA towards an important test of its Nov-July resistance line, now at 87.50.
Only a sharp downside reversal that breaks 82.00 will wreck the current set up-up.
Below is what we wrote one week ago when BABA was trading at 80.33/34.
All of the action in BABA since its March low at 80.01 shows a series of lower-lows, but none of the breaks precipitated an acute downside follow-through, which could represent a meaningful support, accumulation, and bottoming period, or in the absence of a rally above 88.40, a multi-month sideways bearish, digestion period ahead of another downleg that will look much more like an acute downside capitulation.
Right now, unless and until BABA can claw its way above near-term resistance between 82.20 and 83.60, the bearish resolution appears to be more likely. MJP 7/15/15
By Mike Paulenoff, originally published on MPTrader.com.