How An Institution Is Preparing For The Big Alibaba Rebound Play.
Alibaba Group Holding Ltd -ADR (NYSE: BABA ) has been slaughtered since October 2020 when it reached an all-time high of $319.32.
The sharp decline has been partly due to poor U.S./China relations as well and Chinese regulators cracking down on the e-commerce giant and its CEO Jack Ma.
Since July 22 the decline in the stock has accelerated and although there has been some bounce plays for the bulls, the stock has become risky due to new out of China, when the U.S.
markets are closed, causing Alibaba to gap down on four separate occasions.
Gaps fill 90% of the time, however, so it is very likely Alibaba will trade back up to fill its highest gap near the $212 level in the future.
On Friday Alibaba slammed into a support level at the $155.50 level and bounced up slightly from it.
The support level was created back in 2019 and could mark the pivot point for Alibaba’s rebound.
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