BABA - Support and Resistance (Educational)Happy Day to all you traders out there!
Alright, lets get down to business. Fact of the matter is, areas where price action previously found support likely will act as resistance in the future and vice versa. This is important for any trader out there that isn't interested in being an investor in a company and is only looking for short term upside.
What we can see is that going back to BABA's early days listed on the NYSE in 2014/2015, we had significant resistance around the 120 level before BABA retreated to ~$59. It then overtook that level in 2017 and for a short period of time, tested that level and eventually blasted off to $320. Then, on the way down (eventually back to that $60 level - a huge loss for top buyers), it found resistance after it lost that $120 level.
Well, here we are again. We're back near $120 now. If we can get through this level, we should see a move back to a level I've identified using the Trend-Based Fibonacci Extension tool (built into TradingView) which is around $140. You can see in late 2021 and early 2022, we found both support and resistance at that level. I'd expect we'll initially find resistance there and it matches with the 100% extension of the move I'm measuring (check out the video for a simpler explanation).
Ultimately, short term, I'm looking for this $120 level to be reclaimed to get that move to $140, which I've been discussing here for a while. We'll see what happens in October which historically has been a bearish month, but so far it's not terrible.
Safe trading out there, fellas!