Here’s what to watch on Alibaba’s stock chart after the Q4 earnings print
Alibaba Group Holdings, Inc. BABA was up more than 5% from Wednesday’s close and jumped more than 12% after the fourth quarter and full year 2021 financial results were printed.
For the quarter, Alibaba reported non-GAAP profit per ADS of $1.15 on revenue of $32.19 billion, which beat the consensus estimate of $1.10 and revenue of $29.94 billion of dollars.
The Chinese multinational e-commerce company has posted strong growth despite many months of regulatory repression imposed by the Chinese government, as well as ongoing supply chain problems caused by the COVID-19 pandemic.
Alibaba has been heavily battered since hitting an all-time high of $319.32 on Oct. 27, 2020, plunging 77% to hit a low of $73.28 on March 15 – a level the stock is nowhere near. has not been traded since February 29, 2016. .
Although Alibaba has had a few short-lived bull runs over the past couple of months, the stock has pretty much given back its gains each time, closing Wednesday’s session at $83.31. Although a long-term reversal to the upside seems unlikely at this stage, given general market conditions, Alibaba could be in for another bull run after breaking out of a falling channel pattern.
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Alibaba’s chart: The positive reaction to Alibaba’s earnings print caused the stock to break bullish from a falling channel pattern. The pattern is considered bearish until a security breaks away from the upper falling trendline, which may signal a reversal into an uptrend is in the charts. Alibaba has a history of trading in declining channels before breaking away from formations.
- The open gap caused Alibaba to regain support from the 8-day and 21-day exponential moving averages (EMAs), which is a good sign for bulls. If the stock is able to close the trading session above the 21-day EMA and stay above it for a few days, the eight-day EMA will eventually break above 21-day, giving traders bulls more confidence in the future.
- Although Alibaba made the first sign of reversing its downtrend, forming a high above the most recent low of 90.17 printed on May 20, the stock will eventually have to print a lower above from Wednesday’s low, to confirm an uptrend. Bullish traders and investors can watch for Alibaba to potentially form a reversal candlestick, such as a doji or hammer candlestick, above this level to enter a position.
- Alibaba has upper resistance at $96.17 and $104.44 and lower support at $89.95 and $83.84.
See also: How to read candlestick charts for beginners