BABA Stock: Lift Off
(NYSE:BABA) stock surged by 13.29% following an investors day conference where the company announced that it expected this year’s fiscal revenue to grow between" width="300" height="205" srcset="https://i2.wp.com/investorsbuz.com/wp-content/uploads/2017/06/Alibaba-Stock2-300x205-Small.jpg?resize=300%2C205 300w, https://i2.wp.com/investorsbuz.com/wp-content/uploads/2017/06/Alibaba-Stock2-300x205-Small.jpg?w=702 702w" sizes="(max-width: 300px) 100vw, 300px" />
BUZ INVESTORS Alibaba Stock Likely to Continue Alibaba Group Holding Ltd (NYSE:BABA) stock surged by 13.29% following an investors day conference where the company announced that it expected this year’s fiscal revenue to grow between 45%-49% over last year. This bullish news left a significant price gap on the Alibaba stock chart as the share price soared.
My readers and I were not the least bit surprised by this bullish move because on May 16, I outlined key developments on the BABA stock chart that were suggesting that the investment was set to appreciate. I even had the audacity to suggest that $180.00 was a plausible price objective. So on June 8, when the share price leaped by $16.70, I was pretty excited to say the least, because I know that this type of price action carries quite a considerable amount of implications. These implications serve to support my bullish view, and reinforce the potential price objective that I laid out.
The following Alibaba stock chart illustrates the price pattern that continues to suggest that a potential price objective of $180.00 is warranted.
Alibaba Stock Likely to Continue
This price chart shows the trading action since inception. Three months after BABA stock began trading publicly, it forged a significant top at $120.00. This level marked a high that was followed by a significant decline, where Alibaba shares lost 52.33% of their value before a bottom was finally forged. It took approximately 2.5 years to return to this level, and BABA shares broke above this level without even blinking.
This type of price action is very special to say the least, and it was the focus of my previous publication, “Alibaba Stock Is Moments Away from Lift-Off ,” where I outlined the bullish implications of a stock that breaks above its previous all-time high. These implications are especially magnified when this previous all-time high was set shortly after the company began trading on the open market.
The following Alibaba stock chart focuses on the significance of the gap in price.
The price chart above focuses on the price gap as an indicator, and there are two significant price gaps that are highlighted on the price chart above.
The first gap is a breakaway gap, and it served to suggest that that a new bullish trend was born. This new bullish trend was the result of completed reversal pattern known as a double bottom. This pattern was officially completed when the stock price closed above the green horizontal trend line highlighted on the chart above. The price gap served to reinforce the view that a significant bottom had just formed.
The second gap is a continuation gap, which serves to suggest that the bullish trend has only reached its midpoint and higher stock prices can therefore be expected. This gap occurred a few short days after the previous all-time high was penetrated and created the perfect environment for an acceleration in the stock price. The 13.29% price gap will increase pressure on the bears, resulting in further gains as they scramble to unwind their positions.