Can Alibaba Stock Reclaim This Key Support Level?

Alibaba Group Holdings LTD. BABA shares were trading higher Wednesday after the company and Tencent Holdings ADR TCEHY

said they may open their ecosystems to one another. Alibaba was trending on social media sites throughout the day such as StockTwits.

Alibaba was up 1.32% at $212.27 at last check.

See Also: Why Alibaba Shares Are Moving Today

Alibaba Daily Chart Analysis

• Shares are attempting to regain support after falling out of the bottom of a descending triangle pattern.
• The stock is trading below both the 50-day moving average (green), and the 200-day moving average (blue), indicating sentiment in the stock has been bearish..
• Each of these moving averages may hold as a possible area of resistance in the future. The 50-day moving average was rejected as resistance Wednesday.

Key Alibaba Levels To Watch

• Alibaba has been downtrending in the last few months and broke out of a descending triangle pattern with a flat bottom support.
• The support line in the pattern looked to be near the $220 level before it cracked below support and fell further.
• The stock is now looking to cross back above the $220 level and change trends. If it is unable to cross the level, it may see a further downward push.

What’s Next For Alibaba?

Bullish traders would like to see the stock bounce and start heading back up. Bulls want to see the stock form higher lows and cross back above the $220 price level. Bulls are looking to see the stock cross above each moving average for a potential trend change.

Bearish traders would like to see the stock continue to be unable to break above the $220 level. If the level continues to hold as resistance, the stock could see a further downward push. Bears would also like to see the stock continue to hold below the moving averages.