Alibaba Group. ($BABA) extreme area offering a buying opportunity
|In today’s article, we’ll review the recent performance of Alibaba Group. ($BABA) through the lens of Elliott Wave Theory. We’ll review how the rally from the Jan 8th 2026 low unfolded as a 5-wave impulse followed by a 3-swing correction (ABC) and discuss what could come next. Let’s explore the structure and the expectations for this stock.
Five wave impulse structure + ABC correction
$BABA one-hour Elliott Wave chart 1.18.2026
In the 1H chart from Jan 18, 2026, $BABA completed a clear 5-wave impulsive cycle labeled red 1. After such a move, a corrective pullback is typical. As expected, the stock began to retrace in three swings, forming what we identify as an ABC correction.
The price action suggested that buyers would likely appear near the extreme area between $166.53 and $162.31. This zone represents the ideal region where a correction usually ends and a new bullish cycle begins.
In other words, the market took a brief pause before potentially resuming its primary uptrend. Therefore, this structure aligns well with a standard Elliott Wave correction, offering traders a technical roadmap.
$BABA one-hour Elliott Wave chart 1.22.2026
Few days later, the stock bounced and made new highs confirming the bullish trend. Currently, it is looking to remain supported against 1/20 low and higher in wave 3 of (3). Longs should be risk free and looking for $190-207 area as the next possible target.
Conclusion
In conclusion, our Elliott Wave analysis of $BABA suggests the stock continues to trade within a bullish framework. By using Elliott Wave Theory, traders can better anticipate market structure, identify continuation zones, and plan trades with greater confidence.
In addition, understanding how impulse and correction phases interact helps improve risk control, especially in volatile markets like this one. Therefore, maintaining flexibility and discipline remains key as this structure evolves.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.