BABA short term bullishweekly falling wedge, deviation from 20/55 week EMA, bullish divergence in week RSI, double bottom.
short term: 100
percentage: 33% increase from current price
BABAF trade ideas
Long Term InvestmentI've been watching China stocks for years, I think Alibaba is a good value here.
Check out that weekly chart, prices no longer able to touch the bottom of the range. I'll be buying the close of this weeks candle if it stays looking like this.
This Friday marks the close of the day, week, month, and quarter. So some big technical closes coming up.
BABA AnalysisPrice did not play out as analyzed last week. The bullish POI at 90.17 has been invalidated and the order flow has changed again. Right now, the daily timeframe is continuing its downtrend. I'm expecting price to do a bullish retracement into the bearish POI at 85.00 before continuing lower.
BABA AnalysisPrice played out exactly as per my last analysis. Price bounced off the bullish POI at 90.17 and filled the fair value gap at 86.73 and proceeded to rally from there. We see the price is unable to take the highs at 107.16. From here, I'm expecting a retracement into the bullish POI at 91.93 before we see another rally. If this bullish POI gets invalidated, price should be initiating a downtrend to further fill the fair value gap at 86.73.
BABA Long Swing IdeaBABA has returned to the demand zone within a large range measured between $73.28 and $126.27. It is currently completing a price consolidation within a larger falling wedge at area as well. This is great area to start averaging in a longterm position in addition to the trade idea presented below. Ideally I want to enter trade when stock price drops between $74 and $77. If not, I may wait for an official uptrend to begin, creating a higher high and break & retest of the $86-$88 zone.
Trade Idea: Options (Call Contracts)
***$100 Call Strike - Expiration 12/16/22***
Premium = 2.68-2.77 (Discounted price of the stock per share offered within a 100 share contract) ($268 to $277 per contract)
Volume = 862 (Number of contracts currently traded)
Open Interest = 20k+ (Number of Contracts currently held)
Theta = -$3.79 (Dollar amount of premium loss per day)
Delta = +$24 (Dollar amount of premium gained or loss per dollar change of the underlying stock)
***105 Call Strike - Expiration 12/16/22***
Premium = 1.94-2.02 (Discounted price of the stock per share offered within a 100 share contract) ($194 to $202 per contract)
Volume = 101 (Number of contracts currently traded)
Open Interest = 12k+ (Number of Contracts currently held)
Theta = -$3.30 (Dollar amount of premium loss per day)
Delta = +$19 (Dollar amount of premium gained or loss per dollar change of the underlying stock)
***110 Call Strike - Expiration 12/16/22***
Premium = 1.43-1.50 (Discounted price of the stock per share offered within a 100 share contract) ($143 to $150 per contract)
Volume = 2.2k (Number of contracts currently traded)
Open Interest = 13k+ (Number of Contracts currently held)
Theta = -$2.83 (Dollar amount of premium loss per day)
Delta = +$15 (Dollar amount of premium gained or loss per dollar change of the underlying stock)
Stop Loss = Stock Price Close below 73.29 (or Price hit $70)
Baba So I’ve been charting baba adding to it any time it hit 87$ support. We’ll this large symetrical trinagle idea has now been broken and daily candle below. On smaller time frames we came back up and backtest as reistance cureently. I am not enjoying seeing this price action which leads me to be alive this is a confirmed breakdown occurring. This can show us a larger move down could be gearing up. We need to keep a close eye on 88$ level but I am closing 75% my postion I have been adding to lower my risk here.
BABA AnalysisPrice did not play out as expected last week. I was expecting price to bounce off the bullish POI at 91.93. However, note that price is still well within the main bullish POI at 90.17 where price could mitigate and rally from here, in confluence with filling the fair value gap at 86.73.
My biggest mistake in tradingHey all,
Nobody is perfect in trading, and lessons can often be costly. I started trading in the summer of 2020, and I have learned absolute boatloads from both being right and wrong since. I'm here to share with you the biggest mistake I have ever made in trading, and what I took from it. When Chinese stocks first started crashing on news of government restrictions & such, I looked to the opinions of others for advice; I recall watching YouTube videos from people, such as Charlie Munger, discussing why they were buying the dip or sizing up on the dip. I ended up trusting these people more than myself for all the reasons they described, and simply threw my money at Chinese stocks that seemed significantly off their highs while U.S. stocks lingered at ATH's.
This didn't work, and here's what I learned from it:
U.S. stocks are much more predictable than Chinese stocks- Chinese stocks seem to trade very little on fundamentals, and seem to be driven more by pure emotions than any other singular factor. These names will always trade at a discount as long as the U.S. remains the powerhouse economy of the world as Chinese markets are not the markets investors will flock to in times of uncertainty and fear.
Markets move together- as I said, Chinese stocks were the first to fall. Instead of seeing Chinese stocks' rapid descent as a future warning sign for U.S. markets, I simply assumed that Chinese stocks were the ones being irrational and were due to follow the U.S. markets back to all-time-highs. This clearly didn't happen. Instead, Chinese markets fell further, and now U.S. stocks are following suit.
Foreign markets follow the U.S. market- There have been many points on the charts where Chinese stocks seemed to be accumulating. None of these worked, largely because the U.S. markets have yet to accumulate. I don't believe foreign markets will begin uptrends until U.S. equities begin trending up.
Develop a macro thesis, and position accordingly- Since I started trading, I believed that we were in a bubble and were due to crash; I developed this thesis through a bunch of YouTube and looking back at history & charts. This presents a question- why was I buying the dip in Chinese equities if I thought markets were going to CRASH? It doesn't really make sense now, does it?
Trend is your friend 'til the end- the most profitable skill in the stock market is understanding when trend has reversed, or identifying if the trend is still intact. While you can bet against trend(I was doing it back in June prepping for a bounce), you should be extraordinarily careful as all the factors are working against you. Chinese stocks reversed in February of 2021, and have been in a downtrend since. Why buy the dip when you can short the rally?
Cut losses when you are wrong- Buying the dip on Chinese tech was my most expensive lesson; it could have been double the trouble if I didn't cut losses. When you are wrong, be prepared to admit it, and be prepared to cut losses when it is the case. A cut can become an infected wound if left untreated. I'm not encouraging panic- I am simply advocating that you formulate a plan for if trades go awry.
Don't follow the word of others- This is somewhat ironic as I post my ideas for others to see on TradingView and am working to create a hedge fund, but it is important to understand what I am saying here. Many people lack transparency when it comes to losses, and are too prideful to admit when they were wrong(reference GameofTrades on YouTube- the YouTuber that largely crafted my bearish thesis, but who is still desperately bullish). I am not against using the ideas of others, but you shouldn't blindly trust the word of others. The goal of trading should be to be consistently profitable and to be able to accomplish this feat on your own. If you trust other people more than your money more than yourself, I am of the opinion that you should entrust those people with your money whether it be a hedge fund, an ETF like Berkshire Hathaway, or even a mutual fund. Why put all the effort necessary into trading if you are going to follow their trades anyway?
Baba A lot of this market is clinging at support. Support zones are the scariest places to buy up. Why? Becuase emotionally you tell yourself it’s going lower, this is going to crash blah blah blah but when markets are ripping green you have an easy time to buy Becuase “oh it’s going to go without me !” Support here on baba yes it’s testing it now many times but it’s showing it’s very strong support. Doesn’t mean it can’t break and drop fast AF but that’s what stoploss is for. I’m still buying this 87 area. I have been for a month or so now. Every time we reach 87.70/88 area inn buying. Good luck
#BABA Basing with higher lowsAlibaba has been trying to carve out a bottom since March 2022 with its 3rd successive higher low preceded by 2 successive higher highs. Bulls will want to ensure the $87-$88 horizontal support zone is held so as not to make a lower low than the August Base. The bears will be licking their lips for a gap close of $84 but the bulls on the other hand will want to protect this support at all costs for another run to $100 / $110.
Baba short At the end of the day probability must be your friend to be successful. Yes we are at critical support. Both here and on QQQ. Normally I wouldn’t take a short here but looking at mid October puts will give to fill the most recent gap and will help offset some risk with any mid range shenanigans. Weekly Macd. Go ahead and look at any ticker multiple bounces off the weekly Macd without a cross means a large push down is as close to inevitable as something can be. On average you get 1 MAYBE 2 crosses on the weekly Macd a year. Given the bounce a while back and the one a few weeks ago, for us to push up here would take an insane amount of volume and that volume would need to sustain for sometime for the retrace to still not occur and given this is a Chinese stock , I’d be hard pressed to say that even the biggest money is trying to accumulate something like that in this market. Target 0 fib level at the 55-60 range.
ALIBABA LONGThe formed a price divergence, this may indicate that price has reaching the end of the dreaded downside, and we may see new higher high with a monster move to the upside. Alibaba is a great company with predicable and consistent fundamental who has seen a steady growth over the years. This company has incredible brand awareness, there's so much to look forward to, considering the new CEO blatantly challenged Amazon, this may mean rapid expansion and growth outside of China in the coming years. It seems as if Alibaba is looking into becoming a physical goods manufacture by entering the product development space and acquiring other private label companies. This could suggest that Alibaba is perhaps creating a Alibaba basic product line. This is just speculations, non the less the new CEO seems quite ambitious regarding the future of the company, this may entails huge returns for us the investors.
Baba We got a great push we didn’t reach upper reisatnce yet as I was anticipating, but that’s ok looking at my last post I drew out some expectations , we rejected heavy at 105 area which is fine. Watching that lower support as long as we can contiue to use 87/86 area as support this pattern can remain valid. I won’t buy the first tap on the support or the first bounce off it, let’s see if BABa can still control this same support or not before adding. I am still In My longs I took at 87 and 90$ area last time and may add again at 87 unless we lose the support and I’ll have to close upon confirmation, 4 hour candles closing below the trend support. If this plays out, targeting 120 area on next push
