Alibaba's 6.25% Surge Signals Bullish Reversal Amid Golden Cross Expanding MACD and High-Volume Rally

Candlestick Theory
Alibaba Group's recent 6.25% surge suggests a bullish reversal pattern, with the price closing near its high of $155.74. Key support levels emerge around $145.64–$147.36 (December 31–January 2), where prior consolidation occurred, while resistance aligns with the December 12 high of $155.68. The candlestick structure indicates strong buying pressure, though a potential bearish engulfing pattern could form if the price retests these levels with declining volume.

Moving Average Theory
Short-term momentum is reinforced by the 50-day MA crossing above the 200-day MA, signaling a bullish "golden cross." The 100-day MA at approximately $153.80 (November 14) acts as a dynamic support. The price currently sits above all three moving averages, suggesting an upward trend. However, a breakdown below the 200-day MA ($151.47) could trigger a reevaluation of the trend.
MACD & KDJ Indicators

The MACD histogram is expanding positively, with the line above the signal line, indicating strengthening bullish momentum. The KDJ indicator shows K at 80 and D at 75, suggesting overbought conditions. While this may delay immediate reversals, a divergence between rising K and declining price could signal exhaustion. The stochastic oscillator’s overbought zone warns of a potential pullback, though the RSI’s alignment with the MACD suggests the uptrend may persist.
Bollinger Bands
Volatility has spiked, with the price breaching the upper band following the recent rally. The 20-period Bollinger Bands are widening, reflecting heightened volatility. If the price sustains above the upper band, it could extend the bullish trend; however, a retrace to the middle band ($153.80) may test near-term support.
Volume-Price Relationship
The recent session’s high volume ($2.44 billion) validates the price surge, indicating conviction in the upward move. However, declining volume on subsequent bullish candles could weaken the trend. Historically, volume has amplified price gains during breakouts (e.g., October 20, 2025, +3.84%), suggesting current volume patterns align with a sustainable rally.
RSI
The RSI stands at approximately 65, below the overbought threshold of 70, indicating room for further gains. A move above 70 would heighten overbought concerns, but the RSI’s alignment with the MACD and moving averages suggests the uptrend remains intact. A drop below 50 would signal weakening momentum, though this scenario is less probable given current dynamics.
Fibonacci Retracement
Applying Fibonacci retracement from the October 2025 high ($189.34) to the subsequent low ($129.04), key levels include 38.2% ($158.82), 50% ($163.69), and 61.8% ($168.55). The current price near $155.74 suggests a potential test of the 38.2% level as a near-term target. A breakout above $158.82 (December 10 high) could validate the continuation of the trend.

Confluence and Divergences
Multiple indicators concur on a bullish bias: the golden cross, expanding MACD, and high-volume rally all reinforce the uptrend. However, the RSI’s proximity to overbought territory and KDJ’s overbought condition suggest caution. A divergence between the KDJ and price action could foreshadow a pullback. Conversely, sustained volume and a breakout above $158.82 would solidify the bullish case, aligning with Fibonacci and Bollinger Band signals.
Probabilistic Outlook
While the confluence of indicators suggests a high probability of continued upward movement in the short term, traders should monitor the 200-day MA and RSI for early signs of exhaustion. A breakdown below $147.36 (December 30) would invalidate the bullish case, necessitating a reassessment of risk.