Alibaba (BABA) Stock Price and Forecast: Why did BABA rally 10% on Thursday?

Alibaba (BABA) stock rose nearly 10% on Thursday to close at $122.99.
Alibaba (BABA) shares one of the worst performers for 2021.
Regulatory concerns and delisting fears are likely to continue to weigh on BABA.

Alibaba stock recovered some ground on Thursday but the stock remains highly pressured with Chinese concerns elevated. The stock has fallen over 47% this year as most investors have reduced their exposure to Chinese related names on the back of heightened regulatory concerns from China. Fears of potential delistings are also a feature with DIDI moving its listing from New York to Hong Kong.

Alibaba (BABA) stock news

Thursday may have seen some respite for BABA investors but this is most likely due to year end position closing. Given the share price fall there are likely many shorts that are now closing positions. There had been some bullish calls from strategic desks on a broad-based China tech play versus the Nasdaq so this may have seen some interest back into Chinese names. Thursday also saw the news that China is to reduce income taxes and focus on consumption recovery, a trend that would likely favour Alibaba. Alibaba is also considering selling its 30% stake in Weibo.

Alibaba (BABA) stock forecast

This starts to look a little more interesting now. Thursday's move has now put in place a double bottom at $110. Double bottoms are powerful reversal signals and this is confirmed by the upward sloping RSI, a bullish divergence. The MACD is also similarly upward sloping and has crossed over. Look for $110 to hold and $129 to be tested. A break could be powerful with a move to close the earnings gap at $141 next up.

Support at $110 and $100, then $80 from the large volume profile there. Resistance at $129 and $141.

Alibaba chart, daily

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