Alibaba Stock Doesn't Have Easy Path For Sustained Rally: What Chart Says Ahead Of Earnings

Shares of Chinese retail giant Alibaba Group Holding Ltd BABA have risen over 3% this year so far, paring a good part their January gains during this month’s rout. The company is scheduled to report its quarterly earnings on Thursday.

Trendline: The daily chart of Alibaba shows the stock has been hitting resistance along a downward-sloping trendline since February 2022.

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The chart below indicates that the stock hit close to the $129-level in mid-February 2022 and then started trending downward. After finding support close to the $83-mark, the stock started its up move but hit the same trendline resistance in July. Alibaba stock then started retreating after nudging the $126-mark.

Source: Trading View

The next rally it made during the end of 2022 was limited till it hit the ceiling of about $121 at the end of January this year. The continuous lower highs made by the stock since last year — depicted using orange circles on the chart — indicate it could be a while before the stock breaks out of this zone and moves into a sustained rally.

Support: The stock has near-term support close to the $85 mark. If it breaches that level on the downside, it could fall all the way toward the $63 mark.

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