Alibaba Shares Jump 3.56% as Technical Indicators Signal Bullish Momentum

Alibaba Group (BABA) shares gained 3.56% in the most recent session, closing at 135.58 after trading between 132.70 and 135.61 on volume of 19.15 million shares. This analysis examines key technical indicators based on approximately one year of historical data.
Candlestick Theory
Recent price action shows significant volatility, with a notable bullish engulfing pattern forming between September 4th (130.92 close) and September 5th (135.58 close). Key support emerges at 128.51 (August 28 low), while resistance is established at 138.83 (September 2 high). The current bounce off the 130 support level suggests bullish conviction, though sustainability requires confirmation above 137.77.
Moving Average Theory
The 50-day moving average (approx. 122.00) maintains an upward trajectory above the 100-day (approx. 115.50) and 200-day (approx. 108.00) averages, confirming a bullish intermediate trend. The current price trading 10.8% above the 50-day MA indicates strong momentum. A bullish cross occurred in late July when the 50-day surpassed the 100-day, reinforcing positive sentiment.
MACD & KDJ Indicators
MACD histogram shows bullish momentum expansion after the September 5th rally, though still below August peaks. KDJ readings (K: 68, D: 62, J: 80) approach overbought territory but haven't reached extreme levels. The indicators align in signaling continued upside potential, with any bearish crossover below 70 on the K-line suggesting temporary exhaustion.
Bollinger Bands
Volatility expanded significantly during the August 29th 12.9% surge, with price currently testing the upper band near 136.20. The 20-day average at 130.40 provides dynamic support. Band width contraction preceding the late August breakout exemplifies the "squeeze" pattern. Current upper band proximity may induce short-term resistance near 137.00.
Volume-Price Relationship
Key rallies show robust volume validation: August 29th surge occurred on 82.2M shares (YTD high), while the September 2nd follow-through registered 41.6M shares. Recent decline volumes (16.5-24.7M shares) were notably lower than advancing sessions, suggesting distribution is unlikely. The current advance on 19.2M shares demonstrates adequate participation.
Relative Strength Index
The 14-day RSI reading near 65 avoids overbought territory (>70) despite recent gains. Significant divergence occurred in late July when price made lower lows while RSI formed higher lows, foreshadowing the August reversal. Current momentum appears sustainable with RSI in neutral-range expansion. Overextension risk would materialize above 75.
Fibonacci Retracement
Using the swing low of 117.60 (August 28) to high of 138.83 (September 2), the 38.2% retracement at 131.00 contained the September 4th selloff. This successful test implies underlying strength. Extension levels project resistance at 141.50 (127.2%) and 144.30 (161.8%). The 61.8% retracement at 125.50 now serves as critical long-term support.
Confluence and Divergence
Notable bullish confluence exists at 130.00-131.00, aligning the 38.2% Fibonacci level, 20-day moving average, and psychological support. The RSI and price action showed positive divergence during late August consolidation. Minor bearish divergence appears in MACD, where the September high registered lower momentum than the August peak, suggesting trend exhaustion may develop near the 138.83 resistance. Volume confirmation on decisive breaks remains crucial for continuation signals.