Possible the biggest genie wish everThe massive rally Alibaba has experienced has enabled it to close a significant 3M selling fair value gap from 2021.
Interestingly, the price of around $140 is around equal highs January 22 ‘s12M candle.
This looks like a double top…..on the 12M!!!!
Now, I will point out that we HAVE NO CONFIRMATION at this point that this is a 12M double top at all.
But there are a few reasons why I am speculating that we could see a sharp decline.
1. We have just filled a 4 year old 3 month selling FVG (highlighted in red)
2. We did not break above the 2022 high
3. We are Heavily Overbought on the Weekly TF
4. In February we breached the previous 1/4s low, the is the main key to my suspicions
After pumping 80% in less than 2 months, like any timeframe you’d, expect a retracement.
The Golden Retracement level is 0.618 which is highlighted however there are WEEKLY buying FVGs all the way to back to the Previous 1/4s low which has already been breached!
So there is a strong possibility of a full 100% retracement back to 82, if BABA does not continue to pump.
The second big IF……If Baba returns to 82, the price then has a much bigger problem than a 100% retracement.
The price would be close enough and have enough momentum to test at ATL, which would be the neck of the 12M double top.
I think the price would fall through 82.
If price gets there, I don’t think the current ATL prices would get supported and I think we’d get a new ATL of around 80
The new ATL price I’ve guesstimated using Standard Deviations.
This is of course highly speculative but I’ve given my rationale at least.
