April 13, 2015
As a trader you need a few months of data on price and volume to determine the stock trend. This is what a technical traders requirement to study a stock trend. Is price up or down? For Alibaba Group Holding Ltd. (NYSE:BABA) charts below are its stock performance for the last few month since IPO. BABA stock started last (2014) late October, rested for a few days, and then moved up quickly with a momentum, however the momentum ran out of steam. Now the price is below it IPO price. Is it a good time to buy? What is your thought? Put on a technical analyst, what will you say?
Alibaba, BABA Technical Analysis
For a start right after its IPO, the stock gained it momentum and rush up, overtime the momentum and interest ran out, the price slide down. Over three months, the stock price fallen below IPO price. Many has got their fingers burnt at the peak, to redistribute their cash. Event at a lost also cash out. The stock now went below IPO price, and is sideways.
So what is your view and trading strategy? Buy? Sell? Or stand aside and wait?
Alibaba Group Holding Since IPO
If you are TA (Technical Analysis) what will you do?
Alibaba Group Holding stock price crossed 20 MA in near end of last November, thereafter the price has stay below 20 MA. Your buying strategy may want to wait for price cross above 20 MA and stay above 20 MA. It will be even better when 20 MA cross above 50 and 100 MAs.
Alibaba Group Holdings BABA with MAs and Bollinger Bands
As a experienced trader, you are aware that the price is moving in zigzag. In order for the price to move up, the price will have to move down first. Of course there are exception. Remember, only until the rule is broken, then it is confirm the trend is true.
From a S&R, Support and Resistance understanding, Alibaba Group Holding looks like divided in three level. Level 0, 1 and 2. Price has moved from Level 1 to 2 and fall through Level 1 to Level 0. Now the price is traveled in level 0, ranging. Ranging is very difficult to trade. Of course you can trade between the support and resistance. Buy support and sell resistance.
Alibaba Group Holding and Volume
If you want to find early entry, you can add trend lines. One effective way is add channels, instead of draw one trendline; connecting either the valleys or the mountains. You draw the first trendline, copy the trendline and paste it on the opposite sides; copy the valleys trendline and paste on mountains, and vice verse.
You will see price trap in the channels. The price will move from one channel to the other.
In trading we are looking to buy low and sell high. The break away of the channel is an indication of reversal. However, be aware of the traps, bull or bear trap.
Look carefully, can the bear flag pattern is in the process of building? Will you will know, when the bear flag is completed.
All setup can fail, and pattern only true when it is completed.
Alibaba Group Holding with EDC and Chart Pattern
You can find other Alibaba Group Holding technical analysis on this site.
Thanks for visiting this extra ordinary site, AmiBrokerAcademy.com.
It is always to see with other analysis. However, you should do your own eventually. You will have a lot of fun.
Moses
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