BABA: Are the bears strong enough to lower the price to 50.80?
|The current stock structure on the 1H timeframe hints at the formation of a bearish corrective trend, which takes the form of a cycle triple zigzag w-x-y-x-z.
It is likely that at the moment the market is in the final part of the specified pattern. On the chart we see the completed actionary wave y, which has the form of a primary double zigzag Ⓦ-Ⓧ-Ⓨ, and the second small intervening wave x.
It is assumed that the final actionary wave z is currently under development, which, apparently, takes the form of a primary standard zigzag Ⓐ-Ⓑ-Ⓒ, as shown in the chart.
We saw the completion of the primary wave Ⓐ in the form of an impulse (1)-(2)-(3)-(4)-(5), and also the construction of the correction Ⓑ in the form of an intermediate double zigzag (W)-(X)-(Y) could come to an end. In the near future, the shares may continue to fall in the primary wave Ⓒ near 50.80.
At that level, primary impulse wave Ⓒ will be at 161.8% of impulse Ⓐ.
Let's consider another scenario in which the formation of the cycle intervening wave x continues.
It is likely that the intervening wave x will take the form of a simple 3-wave zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree. Perhaps the impulse Ⓐ and correction Ⓑ have already been built.
Now the price is in the wave Ⓒ, more precisely in its final fifth leg. It is assumed that the entire wave Ⓒ is similar to an ending diagonal of the intermediate degree. This assumption will be confirmed when the final sub-wave (5) is formed in the form of a minor zigzag ABC, as shown in the chart.
The final of the ending diagonal should be expected near 150.14. At that level, cycle intervening wave x will be at 38.2% of actionary wave y.
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