To The Moon

In this article, I will be sharing how I use technical analysis on its last traded share price to see the price trend (is it a Bull or Bear?)

Simple Moving Average (SMA) on Alibaba (BABA) Share Price

By plotting SMA chart with 50, 200 level, I noticed that BABA is now going through a Bear trend. The chart does not show us any sign of reversal.

This Bear trend might go on for a while. As mentioned before, we should not depend on one indicators to look at a stock trend.

Next section, I will show the result from Parabolic SAR indicator.

Parabolic SAR indicator on Alibaba (BABA) Share Price

While SMA show us that BABA is undergoing a Bear trend, but using Parabolic SAR, we can see that it has a reversal earlier on, and now it is trending upwards.

A BUY signal was actually triggered in early June 2023. But we can see that price has dropped by almost 2% in last night trading.

So we might want to understand the difference between Parabolic SAR and Moving Averages.

Difference between Parabolic SAR vs. a Moving Average (MA)

Objective:

Parabolic SAR is specifically designed to identify trend reversals, offering insights into potential exit and entry points.

Moving averages, on the other hand, aim to identify and confirm trends, assisting traders in understanding the overall direction of the market.

Calculation Method:

Parabolic SAR employs a mathematical formula involving the acceleration factor and extreme point to generate its dots.

While moving averages simply calculate the average price over a specified period.

Sensitivity:

Parabolic SAR is more sensitive to recent price movements, which makes it faster in identifying trend reversals.

Moving averages are smoother and less responsive to short-term fluctuations, providing a clearer picture of the overall trend.

Summary

After examining the factors that might cause lower ecommerce sales and also looking at Alibaba (BABA) current price trend using 2 different indicators.

This is the conclusion I have come up with :

If we based on SMA, it is showing us that BABA is on a Bear trend but not forgetting that MA is less responsive to short-term fluctuations, which BABA is going through.

Hence, we will look at how Parabolic SAR has show us that BABA has a trend reversal.

So I would think BABA is worth buying consider that it is now in an upside trend after the reversal.

Appreciate if you could share your thoughts in the comment section what do you think of this assessment? Do you think it is fair or shall we use more indicators to confirm?

@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.