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Alibaba Stock Price Forecast: Is BABA Cracking Under Pressure?

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Written By: Michael Abadha
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    Summary:
  • Alibaba stock price faces a market freshly injected with diminishing confidence in the impact of China's stimulus package. What's next?

Alibaba stock price traded downward in Monday’s pre-market session dragged by tepid sentiment surrounding China’s stimulus program. Alibaba (NYSE: BABA) traded at 108.46, down by 1.5 percent in the session, signaling exhaustion after last week’s rise to year-to-date highs of $117.82.

After initially riding on the stimulus wave for the last two weeks, Chinese stocks have eased down following a less-than-enthusiastic response by the government. China’s Finance Minister Lan Foan failed to provide details of the government’s stimulus spending on Saturday, only stating that it would significantly increase its debt issuance to offer subsidies to low-income earners.

Those comments added to the perception that the stimulus plan might not be as impactful as previously thought, bringing downward pressure to the stock market. The Hang Seng Index went down by 0.75 percent in reaction to the development. However, the mainland’s Shanghai Composite Index rose by 2 percent, underlining the mixed signals sent into the market.

Alibaba stock price declined by 6.2 percent in the last five trading sessions, but the underlying momentum is still bullish. The stock is still above the 20, 50 and 200 SMA levels on the daily chart, affirming control by the buyers. However, a break below the psychological $110 support mark adds downward pressure.

Alibaba stock price forecast today

The momentum on Alibaba calls for control by the sellers below 108.85. In that case, initial support will likely come at 108.00. However, if the downward momentum strengthens, it could break below that level. Meanwhile, the downside could extend to test 107.30.

On the other hand, a move above 108.85 will favour bullish control. The bullish momentum could encounter the first resistance at 109.65, but a stronger bullishness could enable a break above that level to test 110.40. Meanwhile, the downside narrative would be invalidated.

This post was last modified on Oct 14, 2024, 11:57 BST 11:57

Written By: Michael Abadha

Michael is a self-taught financial markets analyst, who specializes in analysis of equities, forex and crypto markets. He draws his inspiration from the fact that markets provide an interface through which the world interacts in search of a better tomorrow.

Published by
Written By: Michael Abadha