Alibaba -how to play this trade with a sea of bad news ?
Updated
So Alibaba has seen its share of problems in the last months, from intervention from the Chinese government to fear of being delisted in the US from trumps administration in his battle with Chinese stocks to the missing Jack Ma that we still don’t know where he disappeared to ...? a lot of conspiracy theories in that story..
Well with all this mess I choose to look at the technicals and see what they say.
First, we see stock bottomed down to 211$ on Dec 23rd and gave us a new lower low that we can base on. The rise of Alibaba started yesterday on the news that the US will not delist the stock but let's not forget that is NOT what made the stock tumble down but the cancelation of the Chinese government on the IPO of Ant Group and the intent to nationalize both Ant group and Alibaba and of course the missing former English teacher and China’s poster boy for success -Jack Ma.
A lot of bad news and I am here to bet the opposite in the short term (only short term) , from what the chart tells us along with the current sentiment on the stock is that there is a new rise of optimism in the air and the stock will regain some of its loses in the upcoming days to weeks.
The first target for this prediction to come true is a price target of 251$ which will indicate a correction to the 0.618 line, and the fill on the gap of 9$ (241 to 250). If that target is achieved the stock will get more attention and the volume (buzz sentiment) will go up and take the stock to 269$.
At the 269$ I can see we will have a correction downwards back to the 250-255$ line.
We must remember when trading sentiment and fundamental news it's all about what the volume is displaying us as it is a clear mirror to the investor’s behavior.
If we see Alibaba retreating back down to below the 225$ line, then my analysis is disproven and should be ignored!
By the way, on this chart, I used a public analysis tool called the “Bottom down tool”, a great way of seeing if the asset is bottomed down if crosses the 20 line.
This is a high-risk trade and I argue you to do your own DD and keep an eye on the 225$ line to avoid entering too early
Trade safe and a happy 2021 from FDGT!
Well with all this mess I choose to look at the technicals and see what they say.
First, we see stock bottomed down to 211$ on Dec 23rd and gave us a new lower low that we can base on. The rise of Alibaba started yesterday on the news that the US will not delist the stock but let's not forget that is NOT what made the stock tumble down but the cancelation of the Chinese government on the IPO of Ant Group and the intent to nationalize both Ant group and Alibaba and of course the missing former English teacher and China’s poster boy for success -Jack Ma.
A lot of bad news and I am here to bet the opposite in the short term (only short term) , from what the chart tells us along with the current sentiment on the stock is that there is a new rise of optimism in the air and the stock will regain some of its loses in the upcoming days to weeks.
The first target for this prediction to come true is a price target of 251$ which will indicate a correction to the 0.618 line, and the fill on the gap of 9$ (241 to 250). If that target is achieved the stock will get more attention and the volume (buzz sentiment) will go up and take the stock to 269$.
At the 269$ I can see we will have a correction downwards back to the 250-255$ line.
We must remember when trading sentiment and fundamental news it's all about what the volume is displaying us as it is a clear mirror to the investor’s behavior.
If we see Alibaba retreating back down to below the 225$ line, then my analysis is disproven and should be ignored!
By the way, on this chart, I used a public analysis tool called the “Bottom down tool”, a great way of seeing if the asset is bottomed down if crosses the 20 line.
This is a high-risk trade and I argue you to do your own DD and keep an eye on the 225$ line to avoid entering too early
Trade safe and a happy 2021 from FDGT!
Note
First target reached
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