Alibaba Group Holding Limited (NYSE:BABA) stock is breaking out based on the technical chart
Alibaba (BABA) has had a hot start to 2019 with the shares rising by more than 36%. Even better is that the technical chart and options market suggests that the stock may continue to increase in the coming months, to perhaps as high as $200, a gain of as much as 10% from its close of approximately $182 on March 29.
The last time I wrote on Alibaba was on Feb. 15, noting that Alibaba’s Stock Isn’t Finished Climbing. At the time I thought Alibaba’s stock could rise to a price of around $180 based on the technical chart and options betting.
Now the technical chart suggests the stock could rise to around $201. The stock has risen above a short-term downtrend that began in early March. The relative strength index also is trending higher after breaking a long-term trend lower. The bullish RSI would suggest there has been a shift in momentum from bearish to bullish and is supportive of the stock rising to a higher price. Additionally, volume spiked higher the last two days of March on the breakout, which would indicate that more buyers are moving into the stock.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 190.41.
The projected lower bound is: 172.37.
The projected closing price is: 181.39.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 68.5539. This is not an overbought or oversold reading. The last signal was a buy 15 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 55.74. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 18 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 17 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed down -1.560 at 180.890. Volume was 27% below average (neutral) and Bollinger Bands were 60% narrower than normal.
Open High Low Close Volume___
185.000 185.550 180.890 180.890 2,579,265
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 179.61 173.55 166.43
Volatility: 26 34 43
Volume: 2,432,847 2,905,479 4,088,676
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALIBABA GRP ADR is currently 8.7% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 7 periods.
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