Watch These Alibaba Price Levels as Stock Jumps to 3-Year High After Earnings

Alibaba Group’s (BABA) U.S.-listed shares soared to a three-year high on Thursday after the Chinese technology and e-commerce giant reported quarterly results above Wall Street expectations.

The company said its artificial intelligence-driven strategies had reaccelerated growth in its core businesses, adding that AI-related product revenue achieved triple-digit growth for the sixth consecutive quarter. 

Alibaba shares have surged 60% since the start of the year as of Thursday’s close, boosted by reports that the company will partner with with Apple (AAPL) to provide AI features for iPhones in China. Sentiment towards the stock also received a lift recently after co-founder Jack Ma attended a meeting earlier this week with Chinese leader Xi Jinping, indicating improved dialog between the pair.

The stock rose 8% to near $136 on Thursday, closing at its highest level since November 2021.

Below, we take a closer look at Alibaba’s weekly chart and identify key post-earnings price levels worth watching out for.

Accelerating Buying Momentum

Since undergoing a retracement to the top trendline of a broad symmetrical triangle, Alibaba shares have trended sharply higher, with the price recently climbing back above the closely watched 200-period moving average (MA).

Importantly, the rally has occurred on above-average trading volume, signaling buying conviction from larger market participants, such as institutional investors and hedge funds.

While the relative strength index (RSI) confirms bullish price momentum with a reading above the 70 threshold, the indicator also flashes overbought conditions in the stock, increasing the likelihood of short-term profit-taking.

Let’s identify key support and resistance levels on Alibaba’s chart that investors may be watching.

Key Support Levels to Watch

An initial wave of profit-taking could bring the $103 level into play. The shares may find support in this area near the 200-period MA, which closely aligns with the April and July 2023 peaks.

A close below this location could see the shares revisit the $78 level. This area, currently positioned near the symmetrical triangle’s top trendline, may provide support near a range of similar price points on the chart stretching back to March 2022.

Important Resistance Levels to Monitor

If the stock continues to track higher, investors should initially monitor how the price responds to the $178 level. The shares may run into resistance in this region near the September and October 2021 countertrend peaks that formed during a prolonged downtrend throughout 2021 and 2022.

Finally, buying above this level could fuel a rally to around $231. Investors may seek to lock in profits in this area near a trendline that links the prominent January 2020 swing high with a series of comparable trading levels on the chart over a twelve-month period between June that same year and June 2021.

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As of the date this article was written, the author does not own any of the above securities.