I read online on Monday that half of China’s provinces are in a cowardly lockdown somehow, so I see the news as half full, not half empty. I see China as the culmination of a recession and an “upside” trade opportunity.
Let’s check out a big name chart.
In this daily bar chart of Alibaba Group (BABA), below, we can see that the shares are in a long downward trend and traded below the 200-day falling line. Prices are also below the 50-day line but I’ve seen a lot of testing of the line over the last few months. Prices have not dropped again since March and this tells me that the next test of the 50-day line is going to be successful and BABA should be higher.
March had plenty of trading volume and it could be a “towel throwing” moment for the stock. The 12-day price momentum study showed higher lows from April to May for a small bullish deviation.
At the bottom of BABA’s weekly Japanese candlestick chart, below, we can see some lower shadows below $ 80, telling us that traders are rejecting the low. This is a positive sign for BABA.
The weekly OBV line points downwards but rises from the bottom in early March. The 12-week price momentum study shows higher-lows from September and is a big bullish deviation compared to price activity.
In this daily point and figure chart of BABA, below, we can see a downward price target of $ 55. A trade chart at $ 95 could improve.
In this weekly point and figure chart of BABA, below, we see a $ 19 price target.
Bottom line strategy: Aggressive traders can go long BABA at current levels. A closing risk below $ 75 for now. Add Long above $ 95 if desired. লক্ষ্য 135 is our goal for an assembly now.