Alibaba Group Holdings (NYSE:BABA) may be ready to rival Amazon.com (NASDAQ:AMZN) as king of the online retail space. And there has been some excitement about the last few months of positive price action in Alibaba's stock. But even CEO Jack Ma agrees that it's not time to buy the stock -- at least not yet.
The story comes from the chart below. Since the company went public in September 2014 the stock has spent a lot more time below its first-day price than above it. After a peak in November the stock made a series of lower lows and lower highs. That defines a downtrend. But that changed in February when it stopped falling and created its first higher low.
Short-term traders may have bought at that time and had a good run higher. For the intermediate or position trader, though, it needs to confirm with a higher high to be considered for a purchase. And that won't happen until it moves up over the November 2015 bump. Can it get there? The picture is mixed: price is at the falling-trend resistance line now. A push above that would go along way toward a confirmation.
The momentum would need to pick up as well. So far no bounce has been able to muster a move in the RSI above the 60 level, turning it bullish. The MACD is improving. It has crossed up and is rising, yet is still shy of the zero line -- so, weak bullish. Both turning solidly bullish with a price break over falling resistance could give a pass to waiting for a new higher high to get involved.
But not just yet.