For months I’ve been pointing out the S/R levels of $82-$91 for BABA and that a breakout above would be bullish. Well, that breakout happened last Thursday, so that’s a start. Wave count wise there are simple not enough waves in place to determine if this is an impulse wave (which means higher price in the long run) or not. Hence, well have to start tentatively labelling (see below, click to enlarge) and moreover work with TIs and S/R levels.
Using the technical, we need price to stay above the $91 break out, and also above the “1?” wave high of ($89.29) to keep the possibilities of an impulse forming high. The RSI5 did confirm the $95 price high, and was rejected at the 150d SMA. Hence, here we have additional information. The RSI5 suggest we should see a higher high, and price should stay above the daily R2 at $90.39. Note how the daily BBs are expanding; price-momentum is strong.
Last but not least, the weekly chart shows the important S/R levels even better and boils it down to $80 and $90. Then comes $95, $100, $105 etc. Yes, this stock runs in $5s. The weekly pivot is at $97.20 and if we get price to hit that, then an impulse structure appears much more likely. Note here the tightening BBs: a very big multi-month move is coming. With the TIs pointing up and the weekly SAR now below price, it appears for now that move will be up. However, price does need to stay above the $90/$91 level, which is also around the 20w SMA for this to stay valid