Alibaba Group Holdings, Ltd – ADR BABA fell 20% below Friday’s close on Monday before bouncing about 6% off the day’s low.
The Chinese multinational technology company crashed along with a number of others Stocks from China in the tech field. The Hang Seng Index closed 6.36% lower at $15,180.70, down more than 42% from the Jan. 4 opening price.
Though the Hang Seng and many Chinese stocks traded on American exchanges have been on steep downtrends for much of this year, Monday’s sharp drop came after Chinese President Xi Jinping settled into an unprecedented third term on Sunday … Continue reading
A reshuffle of the Politburo’s Standing Committee to elect loyalists also weighed on Chinese tech stocks. The move has investors worried that the Chinese Communist Party will step up its crackdown on big tech, which could be bad for China’s economy.
Alibaba started to recover from the lows during the day due to technical issues: The sharp decline sent the stock’s Relative Strength Index (RSI) dipped into oversold territory, suggesting a rally on smaller timeframes was likely to come.
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The Alibaba chart: Alibaba’s RSI fell to 23% Monday morning, prompting some traders to buy the stock for a short-term rebound. When a stock’s RSI falls below 30%, it can be a buy signal for technical traders.
- If Alibaba closes the trading session above $60, the stock is likely to print a hammer candlestick, which could indicate higher prices to come on Tuesday. If the stock closes the trading session near the daily low, Alibaba will print a bearish kicker candle, which could indicate lower prices are on the horizon.
- If Alibaba trades higher on Tuesday, the upper gap that exists between $64.10 and $69.47 is likely to fill. In this case, traders can watch for a bearish reversal candle forming near the top of the gap that…
