Alibaba May Be Turning Resistance into Support
Chinese technology stocks have held their ground better than their U.S. counterparts. The NNasdaq Golden Dragon China Index is 8.5 percent below its 52-week high, while the 
SPDR Technology Fund is down 12 percent.
Alibaba, a key name in the group, has some interesting patterns on its chart.
First is the bullish-triangle breakout in August, which it’s now retraced. The previous high around $267 has become the bottom of its range this month. Is old resistance becoming new support?
Next, BABA made a slightly lower low on Monday than earlier in September. But it quickly rebounded. That’s a false breakdown and shows that buyers may be willing to defend the support zone.
Third is the descending triangle. This may create the potential for a breakout as the downward line converges with the support zone around $267. Still, there could be some near-term chopping and retesting of support.
Finally, there may be a catalyst relatively soon. Bloomberg reports that Ant Group wants to raise at least $35 billion in an initial public offering in Hong Kong and Shanghai. (Up from the $30 billion total discussed in August.) BABA owns about one-third of the company.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
SPDR Technology Fund is down 12 percent.Alibaba, a key name in the group, has some interesting patterns on its chart.
First is the bullish-triangle breakout in August, which it’s now retraced. The previous high around $267 has become the bottom of its range this month. Is old resistance becoming new support?
Next, BABA made a slightly lower low on Monday than earlier in September. But it quickly rebounded. That’s a false breakdown and shows that buyers may be willing to defend the support zone.
Third is the descending triangle. This may create the potential for a breakout as the downward line converges with the support zone around $267. Still, there could be some near-term chopping and retesting of support.
Finally, there may be a catalyst relatively soon. Bloomberg reports that Ant Group wants to raise at least $35 billion in an initial public offering in Hong Kong and Shanghai. (Up from the $30 billion total discussed in August.) BABA owns about one-third of the company.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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