Alibaba prices reached all-time highs recently as the share prices remain steady over $300. The stock has been trading in an ascending channel from the height of the pandemic in April.
Since then, several attempts to break out of the upper channel have been met with significant resistance. These false breaks have all led prices to resume their status at the median regression.
The current move away from the mean could be met with further resistance, due to the recent bearish divergence witnessed on the momentum indicator.
Should another attempt to break out of the upper channel fail, then we could expect a fall under the psychological $300 handle.
A short-term perspective hints at slight exhaustion as prices are falling under the median regression. A recent peak at the top end of the $264/$313 upside Fibonacci leg, now sees prices moving towards the Ichimoku cloud.
The next target should a downside occur is the 38.2% leg. This would cancel out the recent hidden divergence on the momentum indicator, signaling a shift in sentiment.
The lower channel would be the next target, which would be a confluence of the golden ratio at 61.8%. We will then look for further clues on the momentum indicator if the stock can prolong the ascending channel structure.
