BABA closes within previous day's range after lackluster session
Alibaba Group Holding Limited (BABA) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
BABA finished Monday at 206.57 losing $0.82 (-0.4%) on low volume, underperforming the S&P 500 (0.38%). Trading up to $1.96 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 21st, BABA actually lost -5.87% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BABA as at Jun 01, 2020):
Monday's trading range has been $3.26 (1.58%), that's far below the last trading month's daily average range of $5.78. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BABA. Prices continued to consolidate within a tight trading range between 196.70 and 207.88 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices are trading close to the key technical resistance level at 207.45 (R1). After having been unable to move above 207.88 in the prior session, Alibaba Group ran into sellers again around the same price level today, missing to move higher than 207.20.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 207.88 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for Alibaba Group. Out of 231 times, BABA closed higher 54.55% 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 54.98% with an average market move of 0.51%.