BABA Showing Potential, But Not Quite ReadyNYSE:BABA has gone on a crazy run this year showing signs of strength. Recently price has stall out leaving us at a cliff hanger. The bull run was more than likely fueled by large investors accumulating shares at previous years lows as shown on the chart. In Wyckoff that typically happens in Phase B, the cause building phase. During this phase price consolidates with multiple tests or fake outs of the range as 'big money' accumulates shares at lows and soaks up the remain liquidity. The recent breakout confirms that supply has been absorbed, and price is ready to move higher, this marks the end of Phase B. The breakout is also called a 'Sign of Strength' in Wyckoff Method, which is also used a trap for buyers, hence the quick move back into the trading range. This move marks the beginning of Phase C, which typically creates a Spring or LPS (Last Point of Support). The Spring will fall below the trading range and quickly recover, while the LPS will find the last point of support within the range and gradually move higher. As you can see in the chart price has not fallen to either, which means there may be more downside to ensue. This correlates with recent "Tariff Wars", so pay attention to the news when or if price retraces to these lower levels. I have currently identified a redistribution pattern on the 1H timeframe which is showing signs of completion and that price is ready to continue down. If prices breaks above $117.50 this will more than likely invalidate the redistribution.
