Alibaba, Does drop make sense?
Alibaba sharply dropped from the top at 195 and a much more higher than expected last earnings. Strong financials we can find for Alibaba, with an increasing Gross Profit and net income since 2017 and an EBIT that decreased vs LY due to an increase in the operating expenses. There is more investment in research and selling and administrative. If the company is financially strong, then the trade war could be influencing the investor sentiment, and that is why the shares dropped after testing the key level at 192.3, not being able to stay above after the break. This makes sense from a fractal pov and the way that high probability iterations are built. The low at 139 happened too early to align with the previous movement to the upside. That is why the price action is looking for a balance with the last high at 195, but in the way, as the current structure is being built, the probability of a new low inside the ideal distribution area (blue dotted arrows) and attractor (blue and green areas) increase. If a bounce to the upside happens here, then the chances of a bullish sequence of higher degree and new highs above 212 increase, getting the final confirmation with the break of the key level at 192. Bears will rule the scene with the break of 93, opening next bearish attractorBack to Blog