Alibaba's Rebound Finds Resistance In Familiar Area

em>Joel Elconin is the co-host of

, a daily trading idea radio show.

Alibaba Group Holdings

shares are trading higher $1.73 at $64.33 in Tuesday's comments. So far, investors are buying into the arguments that their share price is not 50 percent overvalued. The company is going to great lengths to dispel the thesis and has presented an open letter to investors detailing the falsities in Barron's thesis. Only time will tell, if the company can overcome the weakening of the Chinese economy as well as the flaws in projections for growth detailed in the Barron's article over the weekend. After a lower open, the issue found support under Monday's low ($61.48), reaching $61.11 before staging nearly $4 rally. Alibaba has only traded that low on two other occasions. During the August 24 Flash Crash it reached $58 and on September 8, it made a low at $60.25. The rebound has found resistance in a key area and may provide the clue to whether or not the rebound if for real. So far, it has matched Friday's high at $64.79 and retreated to its current level. Also, on September 9, the issue peaked at $64.67. Therefore, putting in a place a triple top (a technical pattern where the price of an asset crates three peaks at a similar level) that needs to taken out for the rally to continue.