Eseandre Mordi
⬤ Alibaba Group Holding (BABA) is carving out a descending wedge formation, with price squeezing between two converging trendlines while trading beneath its 50-day moving average. The setup points to a potential breakout, but nothing's confirmed yet—the stock is still in compression mode, not expansion.
⬤ The bullish case comes with a hard condition attached: BABA needs to reclaim the 50-DMA and actually hold above it before the wedge becomes anything more than sideways noise. Without that reclaim and acceptance, the pattern stays incomplete and the stock remains locked in consolidation. This isn't the first time Alibaba has tested critical support zones—BABA pulls back toward Wave 2 support covered similar technical pressure in recent months.
⬤ If the breakout does materialize and the wedge resolves to the upside, the projected Elliott Wave count suggests wave five could be next in line. The chart lays out a potential gain of around 78 percent from current levels, assuming the structure plays out as mapped. That kind of momentum isn't unheard of in this corner of the market—NIO set to follow BABA rally previously outlined how other Chinese EV names might catch a similar lift if Alibaba leads the charge.
⬤ For now, the 50-day moving average is the line in the sand. A clean move above it would validate the wedge and open the door to that 78 percent target. A rejection keeps the stock capped and consolidating. It's worth noting that broader developments around the Alibaba Cloud partnership announcement have previously triggered sharp moves in the stock, showing how fundamental catalysts can align with technical setups when timing clicks.
Eseandre Mordi
