Alibaba May Be Turning Resistance into SupportChinese technology stocks have held their ground better than their U.S. counterparts. The Nasdaq Golden Dragon China Index is 8.5 percent below its 52-week high, while the SPDR Technology Fund is down 12 percent.
Alibaba, a key name in the group, has some interesting patterns on its chart.
First is the bullish-triangle breakout in August, which it’s now retraced. The previous high around $267 has become the bottom of its range this month. Is old resistance becoming new support?
Next, BABA made a slightly lower low on Monday than earlier in September. But it quickly rebounded. That’s a false breakdown and shows that buyers may be willing to defend the support zone.
Third is the descending triangle. This may create the potential for a breakout as the downward line converges with the support zone around $267. Still, there could be some near-term chopping and retesting of support.
Finally, there may be a catalyst relatively soon. Bloomberg reports that Ant Group wants to raise at least $35 billion in an initial public offering in Hong Kong and Shanghai. (Up from the $30 billion total discussed in August.) BABA owns about one-third of the company.
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