Alibaba (BABY) – Get report share has had a rough run lately. The shares of the e-commerce giant rose by almost 1% on Monday, but this comes after a painful finish from the previous week.
In a holiday-shortened trading week, Alibaba did not hand over gifts to its investors. Instead, it handed out coal, which fell by 13% on Friday and by 15% for the week.
The low point on Friday was that the shares fell by almost 18% when investors sold hand-fist.
At the lowest price of $ 211, the Alibaba share fell nearly 34% from the highs on October 27th. What happened in less than two months?
First, the Ant IPO was drawn only a few days before its public debut. Since Alibaba owns a third share in the company, it was a negative catalyst and clearly shows the cards so much.
While the Ant IPO was delayed due to regulatory issues, the new regulatory concerns on Alibaba were the latest catalyst for the sale.
As we approach 2021, it looks more like a buying opportunity than a selling opportunity. Management must agree, as the company is now increasing the size of its repurchase plan.
Trading of Alibaba shares
Monthly chart of Alibaba shares.
Chart courtesy of TrendSpider.com
Due to the negative catalysts above, take a look at the way Alibaba shares have settled over the past two months. After rising for seven consecutive months, the bulls struck a painful bowel movement.
However, not all hope is lost.
First, the stock finds support on its 21-month moving average. It also found support at the high of $ 211.70 in 2018. The stock reached near this point on Friday and was $ 211.23 low.
Although the peak of 2018 seems somewhat irrelevant, look at how remarkable this area was at the end of 2019 and the first half of 2020.
It lasted six months – until this summer.
With a high-quality growth company, it is about 30% higher than a safe place to dip a toe in the water. Conservative traders may measure their risk at the current low and be looking for a setback.
At a daily close below $ 211, it could place the monthly volume-weighted average price benchmark close to $ 197. It could also put the 200-week moving average in the game, currently close to $ 187 (not in the table above).
These are interesting aspects of the downside.
On the upside, look at a setback to the 50-week moving average near $ 240, followed by the ten-month moving average that is currently close to $ 246. In addition to the latter, the 200-day moving average also comes into play.
Although it may take time before a sustainable recovery takes place, it seems like a reasonable decrease to buy for patients.