BABA price action in recent weeks has shown a series of lower highers and lower lows, which seems to confirm that Alibaba stock is still in a downtrend.
Ahead of fiscal Q2 results scheduled for November 18, Wall Street consensus has Alibaba reporting earnings per share of $1.95 – 28% lower than the year prior – on revenue of just over $32 billion.
These include Alibaba Cloud unveiling both new custom proprietary servers for use at its data centers and in-house designed Yitian 710 server chips.
Up until then, here at FXStreet we thought BABA price would bounce off the bottom of the ascending trend line of a wedge.
Now it appears the series of daily lower highs and lower lows from October 22 will continue, possibly until better news flow envelops Alibaba or risk takers enter the market next week ahead of the November 18 earnings.
To break out of this current rut, BABA stock needs to overtake the 9-day moving average at $164.40 to even become neutral.
When BABA stock broke out of its descending price channel on October 7, it seemed a new day was dawning.
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