Key Technical Levels To Watch In Ailibaba's Chart

For a stock that generates almost all of its revenue from China, the country that is at the center of the current global financial fears, Alibaba Group Holding Ltd BABA’s stock has held up surprisingly well in recent weeks. Despite an 11.4 percent drop so far in 2016, the stock remains well above its late-2015 lows.

However, just because a stock isn’t making new lows doesn’t mean it’s a buy. Here’s a look at the key levels to watch in Alibaba’s chart.

Since Alibaba’s went public in the largest IPO in history back in 2014, the stock has logged a series of lower peaks and lower valleys, a very bearish long-term trend. The stock’s new all-time lows at around $57 established back in August and September failed to break this trend, and the recent highs around $86 in November and December failed as well.


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Recently, Alibaba has been churning in the $70-75 range. In terms of the long-term direction of the chart, the key levels to watch are $57.20 (the all-time low) and $86.42 (the November high). A bounce above $86.42 would indicate the establishment of both a higher low (in the upper $60s) and a higher high and would be an extremely bullish long-term development.

However, a breakdown below $57.20 would indicate a new lower low and likely more of the same for Alibaba in the future.

Disclosure: the author holds no position in the stocks mentioned.