Ali Baba stock (NYSE:BABA) tried to go upwards in
the year 2014, but it later broke downwards and assumed a long-term bearish
bias. Up till now, the bias is bearish and this is supposed to continue.
In the chart, the ADX period 14 is at the level 40,
showing the strength of the current bias. The DM- is above the DM+, meaning
that the bears are in control. The MACD default parameters, has its signals
line below the zero line (though its histogram is currently located above the
zero line, due to some noticeable bullish effort). With further selling
pressure, the histogram may later appear below the zero line and this would
lead to a Bearish Confirmation Pattern in the market.
Those who think the stock could rise may be caught
by surprise any moment from now. The public tend to favor the contrary side of
the trend and therefore, are always caught on the contrary side. Being caught
on the contrary side is common and that is what some called “surprise moves.”
Proud speculators feel too wise to speculate logically and they sustain large negativity
as a result of this.
Eventually, Ali Baba stock may test the support
levels at 60.00 and 70.00 this year.
This forecast is ended by the quote below:
“Cutting winners goes against nature. It doesn’t work for
lions and it doesn’t work for traders. Lions track, kill and eat the entire
prey. They don’t take a bite and leave. After they kill it, they protect it and
stay with it until there is nothing left to eat. I do the same thing with
trends – I follow them until the end.” - Mike Melissinos (Source:
TRADERS’ February/March 2015; page 82)
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Learn from the Generals of the Markets: Market Generals
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