Shares of Alibaba Group Holding Limited BABA are at support and oversold. This means there’s a good chance they rally.
Support is a large group of buyers looking to pay the same price. At support levels, there is more demand than supply for a stock. That’s why downtrends end when they reach them.
Sometimes stocks rally off of them. That’s what happened when Alibaba reached the $183 level on July 27.
The shares are also oversold. This means they're trading at an extreme below what would be its typical trading range.
The RSI Indicator on the bottom part of the chart shows that the last two times the shares were as oversold as they are now a rally followed. It may be about to happen again.
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