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Fan Yang

Alibaba (BABA) - All Eyes on $170 Critical Resistance

Alibaba $BABA has been in correction mode since it peaked just above $210 in June 2018. Since then, price has slid to $130 where it found support twice as we can see on the weekly chart.

BABA Weekly Chart

(click to enlarge)

The $170 Pivot:
- On the weekly chart, we can see a very apparent price top where the neckline was in the $165-$170 area. 
- After price broke below the neckline, it came down to $130.
- We also saw price come back to test the $165-$170 area, and the market resistance this as resistance.
- As we begin the new year, price is again rebounding from $130 and heading up towards the $165-$170 pivot.
- It would be interesting to see if BABA will break above $170.
- A break above $170 would be a bullish continuation signal especially if the RSI pushes above 70.
- On the other hand, if price holds under $170 and the RSI under 60, we would still be looking at a bearish market, although it may have flattened. 
- In the scenario where resistance holds, we can still anticipate downside towards $140. 
- If price does not reach $170 and instead find resistance at $165 or $160, we should have more confidence of BABA falling back to $130 and maybe even lower to a pivot around $119-$120. 

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