Is Alibaba Stock Finally Bouncing Back?

Alibaba Group Holdings Ltd - ADR BABA shares are trading higher Tuesday after the company looks like it is bouncing back after dropping lower the past few sessions. The stock was able to gap higher Tuesday morning.

Alibaba was up 6.46% at $171.46 at last check Tuesday morning.

Alibaba Daily Chart Analysis

• The stock broke out of the descending triangle pattern and moved lower throughout the past few sessions, but now looks to possibly be making a bounce.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is likely facing a period of bearish sentiment.
• Each of these moving averages may hold as a potential area of resistance in the future.
• The $220 price level has held as support multiple times before the stock fell below the level. If the price is able to reach this level once again then it may hold this level as resistance.
• The Relative Strength Index (RSI) bounced back with the price and now sits at 38. This means there are still more sellers than buyers in the stock, but in the past day or two more buyers have moved into the stock.

What’s Next For Alibaba?

Bullish traders are looking to see the stock bounce and start to form higher lows. If the stock can start forming higher lows, it may see a change in trend and start heading back toward resistance.

Bearish traders would like to see the stock continue to fall lower on the downward trend the stock has been on. Bears are still in control of the stock and want to see it continue to trade below the moving averages.

Photo: Courtesy of www.alibabagroup.com