BABA: Bearish signals on chart, despite local enthusiasm

29 nov 2015

Alibaba has an interesting chart, where we can observe many bearish signals, that might be a bit hidden to the untrained eye.
To name a few:

• Yearly MA is trending down and price is below it
  
• Price is currently under the most frequent price since day 1. This implies the downside is more probable to begin with.
  
• The earnings have increased midly but it's possible that this isn't the result of an increase in profitability, but debt.
  
• We have a couple trendlines suggesting weakness, since the daily uptrend was broken. We might see a lower high or M top form here.
  
• Relative strength readings aren't good for BABA.
  

So, in conclusion I'd be looking for shorts once we get a clear technical signal on chart.
There's a daily uptrend that has 1 day left and has hit the target, this might be the perfect excuse to short it prematurely before a downtrend clearly forms. I'll update the chart with an entry once ready.

Good luck,

Ivan Labrie

30 nov 2015

Nota

Range expansion up day, perhaps ignited by the IMF news (they will be including the Yuan in the SDR basket)
Price right below the main resistance. If it breaks up it migh signal an interesting long.

2 dic 2015

Nota

Monitoring, not 100% clear yet. We're inching above resistance.

14 dic 2015

Nota

I had shorted 83.69, stop 85.15 and covered.
Looking at earnings key levels below for support:

I might open a long position, will update the chart then.

15 dic 2015

Nota

I went long at 80.55 today.
I'll add to it tomorrow if price action justifies it.
It's possible to see a rally over the resistance soon. Target is 95-105.

15 dic 2015

Nota

Added to long at 82.34, long working well.

16 dic 2015

Nota

Booked partially, and trailed sl to 83.33.

10 gen 2016

Nota

(Was stopped in profit, then stopped in a second long)
Currently in short.
My initially forecasted general path was respected, just that it took a bit longer to resolve.

15 gen 2016

Trade chiuso manualmente

Covered short.