Why Alibaba (BABA) May Be The Trade Of The Week
We are revisiting an old favorite today for our trade break down and we are looking at the same set up, only this time, it is a bit further along in its formations. If you recall from our last look at Alibaba (BABA), we were in the midst of a move upward within the larger trend of a descending triangle or wedge. Well now, we are just about ready to touch the upper level of resistance on that formation.
For the bullish side of this trade, we have a lot in the way of price that might hold it back from going higher. These resistances come in the form of two moving averages (50 and 200 SMAs), the upper trendline, as well as the whole psych number of 90. If price is able to push through all of that then we should see BABA make another leg higher.
However, if we were to reject at that area of confluence, we would likely see lower prices and not see any support until we made it back down to 80. Despite all that overhead resistance, the current trend is still upward until it isn’t. So, keep BABA on your watchlist if you don’t have it there already for a possible run to the upside.
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