BABA closes lower for the 2nd day in a row
Alibaba Group Holding Limited (BABA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BABA ended the week 1.43% higher at 219.63 after edging lower $0.73 (-0.33%) today on low volume, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BABA as at Feb 14, 2020):
Friday's trading range has been $3.39 (1.53%), that's below the last trading month's daily average range of $4.70. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BABA.
Notwithstanding a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 216.32 (S1). After having been unable to move lower than 218.99 in the prior session, the share found buyers again around the same price level today at 218.25. The last time this happened on January 31st, BABA gained 3.15% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Alibaba Group. Out of 43 times, BABA closed higher 58.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.47% with an average market move of 1.32%.