• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing

Alibaba May Need Magic Tricks to Aid in Bottoming

The risk is that all the gains since March could be wiped out.
By BRUCE KAMICH
Dec 28, 2020 | 01:17 PM EST
Stocks quotes in this article: BABA

Alibaba Group (BABA) gapped sharply lower last week on news that Chinese regulators have launched an anti-monopoly investigation into Alibaba. Let's check and see how much damage was done to the chart and indicators.

(For more on Baba, see here and here.) 

In this updated daily Japanese candlestick chart, below, we can see that prices broke down in early November. Prices closed below the 50-day moving average line and the slope of the line quickly turned negative. BABA gapped below the still rising 200-day moving average line last week as the decline continued.
 
Trading volume surged on the gap down session and the On-Balance-Volume (OBV) line sank to a new low for the move down. A weak OBV line tells us that sellers of BABA are more aggressive.
 
The trend-following Moving Average Convergence Divergence (MACD) oscillator fell below the zero line in the first half of November for an outright sell signal. 
 
 
In this weekly Japanese candlestick chart of BABA, below, we can see that the gap disappears when a weekly high/low chart is constructed. The middle of this large red candle will likely act as resistance on bounces. Prices are below the still rising 40-week moving average line.
 
The weekly OBV line  shows weakness from the middle of October. The MACD oscillator crossed to the downside in November for a take profits sell signal.  
 
 
 
In this daily Point and Figure chart of BABA, below, we can see a potential downside price target in the $202 area.  
 
 
 
In this weekly Point and Figure chart of BABA, below, we can see that the software is projecting the $186 area as a potential downside price target.  
 
 
Bottom line strategy: I have no idea what the Chinese regulators and party leaders have in mind for Alibaba and other companies. What I do know is that the trend turned down in early November and the risk is that all the gains since March could be wiped out if the Point and Figure charts are correct in their targets. Stand aside.  
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Regulation | Investing | Markets | Stocks | Technical Analysis | Trading | E-Commerce | China

More from Investing

3 New Dividend Aristocrats for 2023 -- And Your Portfolio

Bob Ciura
Feb 4, 2023 7:15 AM EST

New to this exclusive club, these names have proven effective long-term compounders of shareholder wealth and dividend income.

In a Week Full of Surprises, This Was the Market's Biggest

James "Rev Shark" DePorre
Feb 3, 2023 4:42 PM EST

We had the Fed's rate decision, jobs numbers, and mega-cap tech earnings land. But here's what was the wildest action.

3 High-Yield REITs for Safe Dividend Income

Bob Ciura
Feb 3, 2023 2:31 PM EST

These names have joined the ranks of the world's most elite dividend growth companies as Dividend Aristocrats and/or Dividend Kings.

The Charts Just Don't Give Much Affirmation on Affirm Ahead of Earnings

Bruce Kamich
Feb 3, 2023 1:54 PM EST

Here's the picture we see from this payment company.

I Found a Good-Looking Arrowhead in This Biotech ETF

Bruce Kamich
Feb 3, 2023 12:50 PM EST

Let's review the charts of XBI, the SPDR S&P Biotech ETF.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 02:58 PM EST REAL MONEY

    Sarge Guilfoyle Breaks Down the Jobs Report, Fed Policy and Stocks!

    Watch it here!
  • 11:35 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading an Irrational Market
  • 02:10 PM EST REAL MONEY

    Fed Rate Decision

    Fed Lifts Benchmark Rate by 25 Basis Points, Sees ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login