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Alibaba Bears Are Winning Right Now, What Will It Take For Bulls To Battle Back?

September 24, 2021 1:21 pm
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Alibaba Bears Are Winning Right Now, What Will It Take For Bulls To Battle Back?

Alibaba Group Holdings Ltd -ADR (NYSE:BABA) shares are trading lower Friday amid continued Evergrande default concerns. Evergrande had an $83 million interest payment due Thursday for a bond that’s set to mature in March 2022. The company has not said whether or not it intends to make the payment.

Alibaba was down 3.67% at $145.55 at last check Friday.

Alibaba Daily Chart Analysis

  • The stock broke out of what technical traders call a descending triangle, it has been pushing lower since.
  • The $220 price level had held as a support level before the break below, the stock has been falling since. The stock will need to start forming higher lows to break the downtrend it is in.
  • The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock has been facing bearish sentiment.
  • Each of these moving averages may hold as an area of resistance in the future.
  • The Relative Strength Index (RSI) has been fading lower the past few days and crossed into the oversold area. The oversold zone on the RSI is an area where the stock is seeing heavy selling pressure and not nearly as much buying pressure.

Related Link: Why Alibaba Shares Are Trading Lower Today

babadaily9-24-21.jpg

What’s Next For Alibaba?

Bullish traders are hoping to see a bounce and for the stock to begin to form higher lows for a time to possibly signal that a trend change is coming. One can connect the highs of the chart to get an idea of when the stock could break the trend. The stock would have to cross above this line to possibly see a trend change.

Bears are in total control of the stock right now and are looking for the stock to continue to fall. As long as the stock continues to form lower highs and stay below the moving averages, bears will continue to maintain control of the stock.

Image by Free-Photos from Pixabay 

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