Gigantic bullish divergence on the Alibaba chart
Updated
As you can see the angle of the divergence (the red trendlines) is very steep both ways, which means there is high volatility in this stock. I would not be buying here at this level unless it breaks the 100$ level and manages to hold it as support. It is almost overbought on the 4h00 so it would make sense for it to take a breather before trying to break the 100$ level which recently became resistance.
I will be buying shares of Alibaba upon bullish retest of the top channel at around 83-86$ (the yellow circle). First TP at 100$ and second one at 125$ and then 160-162$ for the gap fill.
To give a little extra perspective on why I'm taking this trade:
The Hang seng index (HSI) is also sitting close to very long term support trend line right now. China isn't going to let their tech sector crash and lose the long term support trend line as we saw a couple of months ago. As soon as that came close to happening during what seems like capitulation selling volume (on march 16th) the CCP started talking about easing regulations and then index moved from 18k to 22k almost instantly. So yeah, just like the FED, the CCP can decide to help the markets when they see key levels being breached. They understand the importance of economic growth and capital inflows.
For longer term swing trades I would look at the 200$ or 215$ levels to take some profits as well.
Good luck with your trades guys
I will be buying shares of Alibaba upon bullish retest of the top channel at around 83-86$ (the yellow circle). First TP at 100$ and second one at 125$ and then 160-162$ for the gap fill.
To give a little extra perspective on why I'm taking this trade:
The Hang seng index (HSI) is also sitting close to very long term support trend line right now. China isn't going to let their tech sector crash and lose the long term support trend line as we saw a couple of months ago. As soon as that came close to happening during what seems like capitulation selling volume (on march 16th) the CCP started talking about easing regulations and then index moved from 18k to 22k almost instantly. So yeah, just like the FED, the CCP can decide to help the markets when they see key levels being breached. They understand the importance of economic growth and capital inflows.
For longer term swing trades I would look at the 200$ or 215$ levels to take some profits as well.
Good luck with your trades guys
Note
I will be buying some shares around 90-92$ if it goes down there.Note
Volatility has been very low on Alibaba for a while now. Are we seeing accumulation? I think so.
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