Why Alibaba’s stock chart looks ‘constructive’

A specific trade setup has been discussed for Alibaba Group Holding Ltd BABA during Thursday’s “PreMarket Prep” based on bullish comments from a Bank Of America analyst regarding Chinese stocks.

The price action in the setup-based show makes it the pre-market readiness stock of the day.

Alibaba’s Price Action This Week: Alibaba ended last week in the red down $1.62 or 1.4% to $116. The show posted a gain of $4.13 or 3.6% on Tuesday and returned $1.01 or 0.94% on Wednesday to end the session at $119.12.

PreMarket Prep’s take on Alibaba: When the issue was covered on the show on Thursday, it was trading slightly in the green 33 cents at $120.13, which was just above Wednesday’s high of $120.

Co-host Denis Dick made a general comment that, in his opinion, Alibaba’s capitulation sale happened in March, when in five days it fell from $100 to $73.28.

This rapid decline was prompted by JPMorgan, which called all Chinese stocks “uninvestable”, he said: “JP Morgan ticked the sector.”

Alibaba’s chart looks constructive, Dick said.

“It has room up to $125, and above that level you have a major breakout.”

The author of this article has focused on the short-term technical aspects of the problem. It was noted that the issue made four daily highs in the past month, just in the $120 area.

If Alibaba could hold that level at the open, it had room to rise to its March 23 high at $124.11. This was just below Dick’s potential breakout zone of $125.

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BABA course: The number’s first impression held at a session low at 11:30 a.m. EST at $120.63. Within 15 minutes, it broke through the aforementioned March high, stopped and peaked at $125 before reversing.

In midday trading, Alibaba is trying to stay within the $123 handle.

At least one investor was able to capitalize on the show’s bullish commentary:

Discussion on Alibaba from Thursday’s “PreMarket Prep” show can be viewed here:

Alibaba co-founder Jack Ma. Photo via Shutterstock.

Karen J. Nelson