After yesterday's close and this morning's action, BABA has done exactly what the majority of Channel Busters do. When I sometimes say, "Price is deceiving" this is a fantastic example of how starting with an increased move to the upside, a break above a long standing channel and almost as predictable as the sun will rise, once breaking above the channel, it's nearly guranteeed to break below the channel as BABAhas done.
It's too early to say whether BABA's strength is enough to warrant the pullback trade we were initially looking at when first spotting the red flag, Channel Buster, but for now, I'd say shorts have done pretty well and can probably look forward to a bit more downside.
A picture perfect Channel Buster.
The 3 min chart is still deeply negative, before it can even think about an upside reversal t would have to build a reversal process and that's where we'd find out whether BABA still has the strength that has carried it this far and thus worth a long or whether something has changed for the worse.
Intraday charts are perfectly in line since the divergence at the decline.
At this point I'd say the 22-day moving average is a pretty reasonable downside target that should easily be met, much below that and I suspect BABA has more trouble than first expected.
Feel free to email me for trend channel updates or any other chart updates for BABA.
No comments:
Post a Comment