Alibaba Stock Forecast: Rare double rising window pattern spells bullish trend for BABA

Alibaba Stock Forecast: Rare double rising window pattern spells bullish trend for BABA
  • Alibaba stock is now trading near its opening price of the year at $120.38.
  • BABA stock is now gaining back ground due to possible Ant Group IPO.
  • BABA is now trading in a region of thick resistance but has featured bullish Rising Window pattern.

By moving up more than 2% to $120.20 on Monday, Alibaba (BABA) stock is now even for the year. After dropping precipitously in March, touching a six-year low at $73.28, BABA is now trading around its price on January 3 of $120.38.

News on June 17 emerged that the People's Bank of China is allowing Ant Group to form a financial holding company that would allow it to IPO. Alibaba owns about 1/3 of the prominent fintech firm that it helped launch. As a major owner, BABA is a proxy for Ant's hoped-for IPO, which is expected to be the largest of any Chinese company up to now.

Alibaba Stock Forecast: Rare double Rising Window pattern spells bullish trend

It is not surprising that BABA stock has bounced down off of $120 on a first try. $120 has acted as stiff resistance all year. There is a major signal though that this rally is about to get started and may last awhile.

Thursday and Friday of last saw the rare Rising Window pattern. It was doubly rare, because Thursday and Friday performed it back to back. The Rising Window pattern happens when a bullish green candlestick follows another bullish green candlestick with a gap in between. The gap between the Wednesday and Thursday high and low was about $1, but the gap between Thursday and Friday was $5! This is typically a bullish continuation pattern, so traders should expect BABA stock to break through $120 this week.

FXStreet thinks that BABA will make a run at $128 next. That is the resistance zone from the first two weeks of February. Right above there is more resistance at $130, which stems from that level acting as stiff support during the winter of 2018 and early 2019. It is hard to guess whether Alibaba stock can break through both those barriers at once.

Long-term support remains at $82 and $78, but currently there seems to be a rising support line that is leading to higher and higher lows. Near-term support is at $105.

Alibaba Stock Forecast: Rare double rising window pattern spells bullish trend for BABA - 1

BABA daily stock chart

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