Looking at $BABA, it is clear that at 180.80 we had 3 waves down, the upside to 198.35 was corrective, could have been a wave iv up or a b wave up; everything after 198.35 make us consider that the entire structure was an ABC down.
Technical Analysis
As shown below a chart that $BABA hit at 3.618 during the decline also can be counted as part of a 3 waves down move… so there is nothing necessarily bearish versus major macro counts.
Even more, when the last tranch of the decline is subdivided, we see it bottomed at the 1.382 extension
and the bottom struck was right at the 1% extension of any ideal ABC
Taking these three facts, this looks more like a corrective ABC than something more protracted , objectively to make a more clear-bearish long term call we need BABA to hit 194 or 206 followed by more price action that we won’t mention now to not create excess of speculation.
Conclusion
For the moment bulls need to take 178.45 on the upside and above today’s high we will maintain 194 target as secure, bears need to take 168.30,. Have to stress again, today’s price action and decline from 211.70, is not bearish at all… would like to be bearish with the herd… but we have not enough evidence.
Have a nice day. Carlos
Seeking Options Team
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