Shares of Alibaba Group Holdings (BABA) are weak again today. The stock has been in free fall after the Chinese government began cracking down on them and other tech mega caps a few weeks ago. Alibaba shares have fallen from an all-time high near $320.00 to their current $258.30 range. Based on Alibaba stock chart analysis, investors should be looking for more downside before venturing into this trade. The stock will likely see downside until it hits $240.00 and could trade as low as $232.00. As a technical trader, I will begin accumulating at $240.00 and keep buying down to the $232.00 level. In that range, investors should expect a significant bounce higher, even possibly seeing $260.00 within weeks.
The Alibaba stock chart analysis is simple to read. The daily 200 moving average is at $239.37. This is where the $240.00 initial accumulation level comes from. Then there is a significant gap fill at$236.75 which will be additional major support. Lastly, the $232.00 level is a significant pivot high from January 2020, just as the Covid-19 pandemic was starting. Three major technical points within a few Dollars give us a major support range. In addition, as Alibaba continues to trade lower, the technical metrics like RSI and MACD will become oversold to the point of adding fuel to a bounce.
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