Alibaba Stock Surges 8% To $116.97 As Technicals Signal Bullish Reversal

Alibaba Group (BABA) rose 8.09% in the most recent session, extending gains to four consecutive days with a cumulative 12.66% advance, closing at $116.97. This momentum follows a rebound from a July 9 low of $103.83.
Candlestick Theory
The four consecutive bullish candles, culminating in a long white candle closing near the session high of $117.215, signal robust buying pressure. This pattern invalidates the preceding bearish engulfing candle on July 9. Key resistance is now established at $117.22–117.50, aligning with the June 24–26 consolidation zone. Support emerges at $108.20 (July 14 high) and $106.30 (July 11 low), reinforced by the 50% retracement of the recent rally.
Moving Average Theory
The 50-day SMA (∼$119.50) remains above the current price, suggesting residual intermediate-term bearish pressure. However, the golden cross pattern persists with the 50-day above the 200-day SMA (∼$112.30), confirming the primary uptrend. The 100-day SMA (∼$117.80) coincides with current price action, representing immediate resistance. A sustained breach above this level would signal bullish momentum resumption.
MACD & KDJ Indicators
The MACD histogram has turned positive, reflecting accelerating upward momentum after a July 10 bullish crossover. KDJ shows overbought conditions, with the K-line at 90 and D-line at 85. While this indicates near-exhaustion risk after the sharp rally, the lack of bearish divergence suggests underlying strength. Traders should monitor for KDJ crossovers or MACD flattening as reversal precursors.
Bollinger Bands
Price has surged to the upper band ($117–118) after a two-month period of band contraction (May–June), signaling a volatility breakout. The expansion from the lower band in early July validates the bullish reversal. Current proximity to the upper band may prompt short-term consolidation, with the middle band ($112) now acting as dynamic support.
Volume-Price Relationship
The rally was confirmed by rising volume, peaking at 34.4 million shares on July 15 – the highest since May 15 and 160% above the 30-day average. This divergence from the low-volume decline in late June supports sustainable upside. Notable accumulation occurred near $106–107 (July 10–11), establishing a volume-based support floor.
Relative Strength Index (RSI)
The 14-day RSI (64) has exited oversold territory (<30 on July 9) but remains below overbought thresholds. Momentum recovery without extreme readings suggests room for further upside. However, the speed of its ascent from 28 to 64 in four sessions warrants caution for potential pullbacks. Historical divergence occurred in April–May when price made higher highs while RSI trended lower, preceding the subsequent correction.
Fibonacci Retracement
Using the March 17 high ($147.57) and July 9 low ($103.83), key retracements are $117.47 (23.6%), $122.38 (38.2%), and $125.70 (50%). Current price action tests the 23.6% level, corresponding to the June swing lows and Bollinger resistance. The 38.2% level converges with the 100-day SMA and May consolidation zone, creating a high-probability resistance cluster near $122–123 if the rally extends.
Confluence and Divergence Notes
Confluence exists at $117–118, where the 23.6% Fibonacci level, Bollinger upper band, and June support-turned-resistance intersect. Divergences are currently absent, with MACD, volume, and RSI unanimously supporting the bullish move. The sole cautionary signal is the KDJ overbought reading, which appears early-stage given the velocity of the rebound. Probable consolidation near $114–118 may precede the next directional move, with sustained closes above $117.50 indicating bullish continuation.