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The Bottom May Be In For Alibaba (BABA)

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After 9 straight days of red, BABA (BABA - Free Report) shares are finally bouncing. The stock bottom out at $252.50 on Wednesday (Nov. 11th), a 20% decline in just 2 weeks.

This whip-lash selloff was catalyzed by regulatory concerns surrounding Alibaba: Ant Group's IPO suspension (Alibaba has 33% stake), China's anti-trust 'draft rule' aimed at Alibaba, and SEC's talk about delisting Chinese companies was the icing on the cake.

This drop was overdone and pushed BABA shares into very oversold territory, which led to the two-day bounce we are seeing. BABA is up 5% since Wednesday's lows fighting at the $265 resistance level today.

Whether this is the end of the pain for BABA shareholders remains to be seen, but a short squeeze is evident these last couple days.

If we can materially get past $265, the next resistance levels to watch are $268 and $270. On a big downside push, I am looking at the 200-day MA around $240, a price where I would mortgage my house to buy more at.

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Alibaba Group Holding Limited (BABA) - free report >>

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