Stock of the day: Alibaba
14 June 2024
In today's stock of the day, let's discuss Alibaba due to a significant development on the chart. Alibaba has given a proper signal to sell. In May, the stock experienced an impressive bullish breakout above the black downtrend line and orange horizontal resistance, reaching $90 by mid-May. However, since then, the price has steadily declined, finding temporary support at the beginning of June. Despite this, yesterday's session saw a bearish gap and a significant drop, breaking below the orange horizontal support. This breakout indicates a return to negative sentiment for Alibaba.
The May rally that saw Alibaba breaking past the black downtrend line and the orange horizontal resistance was short-lived, as the stock hit $90 and then reversed sharply. This decline was continuous, pausing only briefly in early June at the orange support level. Yesterday's trading session was particularly telling; opening with a bearish gap, Alibaba closed with a significant bearish candle, decisively breaking through the orange support. This bearish breakout signals a renewed negative outlook.
For those watching Alibaba, the current technical signals are clear. The stock's inability to maintain its early May gains, coupled with the recent break below the crucial orange support level, underscores a bearish sentiment. Traders should consider this bearish breakout as a potential sell signal, reflecting the broader negative momentum that has gripped Alibaba since mid-May. As always, further monitoring of market conditions and additional technical confirmations are advised before making trading decisions.