Monday, March 9, 2015

Annual Trading Forecast on Alibaba (2015)

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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