Technical Analysis on Alibaba (BABA)

8月31日

Alibaba (BABA) has been in a long-term downtrend that began in October 2020. In the medium term, however, the price has entered a phase of compression, suggesting a possible pause or reversal of the trend.



Analyzing the volumes using the Volume Profile, we can see that the price is currently caught between two key Points of Control (POC):

POC 1: A significant volume level that considers the entire historical data of the stock, located around the $80 area.
POC 2: A medium-term POC that reflects the current phase of compression.


Bullish Scenario:
To consider a potential bullish scenario, it will be necessary to wait for the price to reach POC 1, located around the $80 area, followed by a breakout and a possible retest of the descending trendline. The first significant resistance and target for this bullish scenario is around the $120 area.



Bearish Scenario:
For a continuation of the downtrend, it is important to monitor the price in relation to the two POCs. If the price drops below both levels and breaks the ascending line, with a possible retest, we could see an extension of the downward movement.