Alibaba Stock Jumps 4.15% to $141.20 Amid Bullish Technical Signals

Alibaba Group (BABA) surged 4.15% to close at $141.20 in the latest session, marking a two-day gain of 7.85% amid heightened trading activity. This bullish momentum follows a volatile period and warrants comprehensive technical assessment across multiple frameworks.
Candlestick Theory
The current rally forms a bullish engulfing pattern, with the 9/08 close ($141.20) overcoming resistance near $138.77 (9/03 high). The preceding long red candle on 9/04 (-4.05%) established support at $130.06, while the 8/29 marubozu candle (+12.90%) solidified the $128.51 floor. This price action suggests strong conviction above $135.58, though rejection near $141.22 resistance could trigger profit-taking.
Moving Average Theory
The 50-day MA (~$122) crossed above both the 100-day (~$117) and 200-day (~$110) averages in late August, confirming a major trend reversal. Current price trades 15.8% above the 50-MA, indicating robust bullish momentum but extended short-term positioning. The ascending MA alignment supports intermediate upside, though mean reversion toward $130-$135 remains possible.
MACD & KDJ Indicators
MACD registers a bullish crossover with histogram expansion, signaling accelerating momentum. However, KDJ’s %K (94) and %D (88) demonstrate extreme overbought conditions exceeding 90. This divergence warns of near-term exhaustion, as KDJ’s overextension contrasts with MACD’s steadier trend confirmation. Traders should monitor for KDJ bearish crossovers.
Bollinger Bands
Price breached the upper Bollinger Band ($137.50) on 9/08 after a bandwidth contraction in early September. This volatility breakout validates bullish sentiment, but closing outside the band carries an 85% historical probability of reversion to the 20-day midline ($133.20). Sustained trades above $138 would signal exceptional strength.
Volume-Price Relationship
The rally’s credibility is confirmed by rising volume, peaking at 41.6M shares on 9/02 and 19.9M on 9/08. Distribution days were scarce during the consolidation, with only one high-volume decline (24.7M shares on 9/04). This accumulation pattern suggests institutional participation supporting higher prices.
Relative Strength Index (RSI)
14-day RSI (73) resides near overbought territory, though not yet extreme. The current reading diverges moderately from late August’s RSI peak (81) despite higher price highs, suggesting weakening momentum. While RSI alone doesn’t indicate reversal, confluence with KDJ overbought signals heightens near-term caution.
Fibonacci Retracement
Applying Fibonacci to the June low ($94.06) and September high ($141.22) reveals critical levels: 23.6% ($129.70), 38.2% ($122.20), and 61.8% ($110.90). The recent consolidation respected the 23.6% support, transforming it into a launchpad. A pullback would find strong confluence at $129.70, aligning with the 50-MA and volume-weighted average price.
Confluence and Divergence Synthesis
Notable confluence exists at $135-$138, where Fibonacci support, Bollinger midline, and candlestick reversal levels converge with the 9/05 swing high. Conversely, KDJ/RSI divergence from price action suggests waning momentum. The primary outlier remains volume—while supportive, it hasn’t exceeded the 8/29 capitulation spike (82.1M shares), leaving breakout sustainability questionable below $150. Probabilistically, the evidence favors continued upside above $135 with interim resistance at $144.50, though technical exhaustion may limit immediate gains.