What's going on moon gang, i hope that you're having a great day the fourth trading week of november, is now over. So in this video i will be going through an updated technical breakdown of alibaba which, as you may know, is currently one of my favorite stocks. I will be highlighting the key areas of support and resistance, so we have a better idea of what price levels to watch as december rolls around. But before i dive into all that, if you're new to the channel don't forget to join the moon gang by hitting the subscribe button and as always, if you enjoyed this video, don't forget to drop a like, because it really helps with getting it in front of Other people who may be interested all of your support is truly appreciated and now that i got that out of the way, let's get started before we dive into the charts, i thought it could be useful to give you an update on.

What's going on with the regulation issues that chinese companies such as alibaba are facing in the u.s, this article can be found on the wall street journal house to vote on booting chinese stocks from u.s over audit rules. Lawmakers next week are likely to force chinese companies with shares traded on american exchanges to finally comply with audit oversight rules or leave u.s markets. All together house leaders plan to consider a measure on wednesday december, 2nd that would force chinese firms such as alibaba, either to make the transition to getting an annual audit that is reviewed by u.s regulators or remove the shares from trading in the u.s. At the time that i'm making this video, this piece of legislation does have bipartisan support and it was unanimously passed by the senate in may of this year.

I think there's a very good chance that the house also passes it. The legislation, if and most likely when it becomes law, would give chinese companies and their auditors three years to comply with inspection requirements before they could be kicked off the new york stock exchange or nasdaq stock market. Now three years is quite a bit of time, so you don't have to make any decisions in the immediate future, as i mentioned before. I do think that this piece of legislation will get passed, which leads to the big question.

What does that mean for companies such as alibaba? The way i see it? This could play out in one of two ways they could comply with the new auditing rules and everything would eventually go on as normal or they could decide not to, and they could risk being booted from the u.s market. It's the second scenario that could cause a headache for investors. Typically, when the nyse or nasdaq deal is companies, their shares continue to be traded over the counter, so investors can keep buying and selling them, but this bill would also ban otc trading of chinese companies whose audits hadn't been inspected after three years. U.S investors wouldn't have an easy way to hold chinese stocks.

If such a ban takes effect depending on how a company responds its u.s shareholders would either sell their shares back to the company or swap them for shares listed on overseas exchanges. More specifically, e-commerce giant alibaba, which is listed on the new york stock exchange with a secondary listing on the hong kong stock exchange, has said that the legislation could force its u.s investors to convert their holdings into hong kong shares. This is problematic because not all u.s brokerages offer access to foreign stocks as an investor. There really isn't much that we could do at this moment in time.

We just have to wait to see what happens with the house on wednesday december 2nd, as things continue to develop with this issue i'll make sure to keep you updated in future videos. But for now, let's switch over to the charts. The fourth trading week of november is now over and ever since the 18th alibaba has been putting in a nice bounce, alibaba trades under the ticker baba, and the stock is currently at 276 dollars. As we head into december alibaba closed out the week by dropping 0.45 percent at this price level, that means that alibaba has a market cap just under 750 billion dollars over the past week.

Alibaba is up 6.38 over the past month. It's down 10.2 percent and from the start of the year until now, it is up 30 if you've been keeping up to date with my alibaba videos, you'll be familiar with the current technical situation for those of you who are new to the channel. Here's a very quick recap of what's been going on from a high level view. Alibaba has been in a bullish uptrend from the start of 2019.

Until now, the stock has consistently been posting higher lows and higher highs. More recently, in july of this year, alibaba was caught in this bullish pennant. Where was making lower highs and higher lows until a bullish, breakout and rally to the psychological level of 300 from there, there was a sell-off and the stock found support at 268, which was the start of this pennant after bouncing to 283 and then reaffirming 268. Once again, the stock rallied to its current all-time high of 319 alibaba clearly performed well in the month of october, but the same could not be said about november.

A lot of this sell-off had to do with new regulation issues from both the u.s and chinese government, and on top of that, the ant ipo was delayed. All of these things clearly had a negative impact on the stock, but following a pretty positive earnings announcement, some bullish comments made by ray dalio and a very low rsi investors found value at these prices and the stock has managed to bounce from 252 up to 276.. Personally, i do think that this bullish momentum will continue and in the near term, i'm expecting the bull camp to get the stock above the bottom of this gap at 280, then the relative high from mid-september at 283 and then a full gap fill at 290. from The most recent close that would be a gain of 5.1 percent once we get above that, the next resistance would come at 299, which would be a gain of 8, and just so, you know to get back to the all-time high of 319.

That would be a gain of 15.5 percent if, for whatever reason, alibaba is rejected in this region, support could be found at this trend line, but the first price level, i'll mainly be watching, would come at 268, which would be a drop of 3 and past that We have the recent low of 252, which would be a drop of 8.6. As things currently stand, i do favor the bull case much more than the bear case. My reasoning for this is that i think the regulation issues will eventually get figured out. I think that the ant ipo will be huge, and recently the stock has a good amount of momentum.

In fact, i favored the bulk case so much that i recently bought some call options and i'll explain that in more detail in just a bit before we switch over to the 4-hour chart, i want to quickly bring your attention to this region between 241 and 246. Now i do think it's quite a long shot for alibaba to return to this area, but if it does, i think it would be an excellent buying opportunity and i would personally be investing in as many shares as i possibly could. Honestly. If you have a long enough time frame, i think prices in this entire region will be a big discount relative to where the stock is heading years down the road.

It's just a matter of time before alibaba hits 1 trillion dollars in mid-november. At the tail end of this sell-off, we could see that there was bullish divergence in the rsi. This means that, even though the stock was making new relative lows, the rsi wasn't - and this is commonly assigned that the sellers are starting to get tired. When i saw that this technical situation was developing, i decided to invest in alibaba and my cost basis is 255.

Since then, the stock has gotten above. The previous resistance turn support at 268. It broke above this trend line and then it was rejected at the bottom of the gap at 280.. Moving forward, i could see alibaba consolidating a bit or potentially having issues at the previous resistance of 283 or this blue trend line.

But with that being said, though, i do think that the gap fill up to 290 will take place sooner rather than later. In fact, i'm so confident in this that i decided to put my money where my mouth is and increase my long exposure on alibaba. In addition to the shares that i own at 255 dollars, i recently bought two call options on the stock, for the purpose of transparency. Here are the exact details of those contracts.

The strike price is 300, the expiration date is january 21st, and the premium per contract was 5 dollars and 30 cents. As a quick side note, this is a smaller position relative to my overall portfolio, but that mainly had to do with it being my first trade on the weeble trading platform. I am by no means an expert weibo user, but what i'm seeing so far is pretty impressive if you're at all interested, there's a sign up link in the description of this video and if you deposit, a hundred dollars or more you'll, be awarded four free stocks. So it's definitely worthwhile to check out, as things continue to progress from a technical perspective, i would highly recommend paying attention to these levels of support and resistance, and also watching for divergence in the rsi.

All this will give us a better indication of the pockets of supply and demand, but to be perfectly clear, as things currently stand, i am bullish on alibaba and i'll be very bullish once the bull camp pushes the stock above this trend line and the resistance at 283, as things continue to develop both fundamentally and technically, with alibaba i'll make sure to keep you updated in future videos and also keep you posted on how the options play works out so make sure you have your notifications turned on and as a quick side note, The name of the charting software that i use is trading view and there's a link in the description of this video. The company is currently running a black friday deal that is 60 off and you get your first month free. So, if you're interested definitely check it out thanks for making it to this point in the video, i truly hope that you found some value in it. If you have any suggestions, recommendations or questions, please feel free to.

Let me know, and as a quick reminder, everything expressed in this video are my own opinions and i am not a financial advisor. So i'd recommend that you complete your own due diligence. I would love to know your thoughts on alibaba in a comment below. Where do you see the stock going in december and as always, if you enjoyed this video, don't forget to drop a like, and if you haven't already don't forget to join the moon game by hitting the subscribe button.

All that engagement really helps me out thanks for watching and until next time best of luck in the markets. You.