Alibaba ($BABA) finished todays trading session +3.42% on the day. The stock had strong upward momentum today following in the footsteps of the overall markets. Below you can see the initial chart we posted on $BABA last Wednesday (5/2/2018).
We had mentioned the stock could go either ways depending on price levels it decided to test. We liked the $176.10 arena for support level. We thought if the stock rejected that level and dropped below it, it would sell off. On the other hand, we were watching $181.97 for a solid resistance level. We thought if the stock could hold that level and surpass it, then it had a good chance to test $186.71 levels and beyond. The charts played out nearly perfectly. $BABA briefly spooked the market with a quick sell off, but the $176.10 served as super strong support and never got rejected. The stock bounced back and absolutely rallied. Below you can see an updated chart on $BABA rally.
As you can see from the updated chart, we are approaching another critical resistance level in our opinion @ $198.21 -- IF the rally can continue and surpass those levels, it seems as if bulls can stay in control and attempt to test the high at 206 levels. On the flip side, the stock is reaching overbought territories. Historically the stock has sold off when reaching the 70 RSI levels we are nearing. A sell off could retest the 191.46 level, but if not and it can accelerate through 198.21 we could see it test that high in our opinion.
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