After Alibaba's dream of reaching 144 yuan was shattered, it plummeted. Whether it can hold above 128 yuan has become the short-term critical support level.

$BABA-W (09988.HK)$ Market sentiment in the near term has clearly shifted rapidly from optimism to confusion. The market had been expecting a revaluation of AI, cloud businesses, and tech giants, with some even discussing long-term targets of 180 to 200 yuan. However, after the stock price quickly retreated from 144 yuan to near 131 yuan, investor confidence has noticeably wavered. The most pressing issue now is no longer whether Alibaba remains a good long-term investment but whether it has entered a weak pattern of 'rising and immediately falling, rebounding and retreating' in the short term.

From the comments, it’s clear that market sentiment towards Alibaba is quite typical. The bullish side still believes there is value in buying around 131 yuan, with some choosing to increase their positions, others seeing this as merely a pullback from previous gains, and some believing that cloud business growth and AI investments will eventually support a revaluation of Alibaba upwards. Particularly, phrases like 'CICC raising its monitoring,' 'accelerated cloud business growth,' and 'tech giant long-term target of 180 to 200' suggest that the market hasn’t completely lost faith in Alibaba’s fundamentals.

The issue, however, is that the stock price movement is clearly weaker than market expectations. Many comments are beginning to express sentiments like 'sell as soon as it rises,' 'falling so fast,' 'treading water,' 'cutting韭菜 (small investors) back and forth in two days,' and 'head-and-shoulders bottom turning into a trap,' indicating that trust in the short-term technical structure has started to collapse.

Especially since the drop from 144 yuan to 131 yuan took only one and a half days, which has dealt a significant psychological blow to the market. Many investors thought the breakout had already occurred, but the rapid retracement caused a large amount of capital that chased the stock at higher levels to be trapped. This also explains why comments have begun to appear saying things like 'people who bought above 140 yuan, come laugh at me,' 'chasing Alibaba higher is painful,' and 'getting back to 144 is winning by losing less.'

From a technical perspective, Alibaba closed at 131.20 yuan the previous day, with both daily and weekly charts indicating strong selling pressure, and the short-term trend leaning bearish. The current price is below the 50-day moving average of 137.84 yuan but still above the 200-day moving average of 110.63 yuan, reflecting that the medium-term structure hasn't completely broken down, though the short-term trend has clearly weakened.

The most important support level currently is 128.47 yuan. Market rumors have repeatedly mentioned the 129 yuan area; if 128.47 yuan is breached, the market could easily test lower levels. As significant funds have re-entered around 131 yuan, a further breakdown below 128 yuan would significantly intensify short-term panic sentiment.

In terms of resistance, 137.84 yuan is the key short-term threshold, which also coincides with the 50-day moving average. If Alibaba fails to reclaim this level, any rebounds should still be considered weak recoveries rather than a true return to an upward trend. Further above, the 144 yuan area has now become a zone with significant trapped positions.

The Relative Strength Index (RSI) stands at approximately 43.89, which indicates neutral-to-weak conditions and is not yet in extreme oversold territory. The ADX is around 27.47, suggesting that the current trend strength still exists but is biased towards weakness. An ATR of about 6.41 reflects a noticeable increase in recent volatility, showing highly unstable market sentiment.

The most common question in the market right now is whether one should add positions at 131 yuan, if there’s still a chance to see 144 yuan again, or if this is merely 'gap-filling.' Technically speaking, the 131 yuan area is close to the support zone, but no definitive bottoming signal has emerged. Only if 128.47 yuan holds firm and 137.84 yuan is reclaimed will market sentiment have a chance to improve; otherwise, even short-term rebounds may be seen as opportunities to reduce holdings.

Additionally, the market is increasingly focusing on AI and computing power narratives. Some discussions mention 'the Alibaba-Tencent AI battle' and 'computing power rewriting the underlying script of China's internet,' indicating that investors are still willing to give tech giants room for AI-related imagination. However, the issue is that funds currently prefer trading short-term momentum rather than holding long-term, leading to sharp price fluctuations.

Overall, Alibaba’s biggest issue right now isn’t the complete loss of fundamentals but rather the market’s declining trust in the short-term technical trend. When investors start viewing every rise as an exit opportunity, it naturally becomes difficult for the stock to form a stable upward trend. The key going forward will be whether 128.47 yuan can hold as support and whether 137.84 yuan can be recaptured.

Key strategy: Short-term price has fallen below multiple short-term moving averages, with 128 yuan as a crucial support level. If it fails to hold, there could be further downside testing towards the 120 yuan range; a recovery above 135 yuan would be needed to repair the downward trend.

Strategy One | Rebound Deployment

$SGALIBA@EC2701A.C (28103.HK)$ | Strike Price 135.6 yuan | Actual Leverage 4.0x | Close to current price zone, suitable for betting on a technical rebound repair $UBALIBA@EC2612B.C (27776.HK)$ | Strike Price 145.1 yuan | Actual Leverage 4.4x | Longer time value, suitable for waiting for gradual stabilization $UBALIBA@EC2609B.C (26544.HK)$ | Strike price 145.98 yuan | Actual leverage 6.1x | Higher leverage, suitable for short-term rebound plays

Strategy Two | Breakout Momentum Chase

Strategy Three | Deploy on Support Breakdown

$UBALIBA@EP2607C.P (26011.HK)$ | Strike price 127.28 yuan | Actual leverage 6.6x | Close to support level, suitable for chasing weakness after breaking below 130 yuan $UBALIBA@EP2607B.P (24646.HK)$ | Strike price 122.78 yuan | Actual leverage 7.2x | High-leverage product, suitable for rapid decline deployment $UBALIBA@EP2609C.P (27125.HK)$ | Strike price 109.9 yuan | Actual leverage 5.6x | Suitable for extending downward moves after a medium-term weakening trend

@HoshibashiTowa: The 129-yuan mark has become an important psychological level for the market; once it breaks down, panic could intensify.

@231572173After the failure of the head and shoulders bottom pattern, the market naturally loses confidence in technical charts.

@天水圍大總統Recently, many technology stocks indeed show similar movement patterns.

@三星ETFThe compute power narrative still exists, but funds are now more inclined toward short-term trading.

@我要賺超級多錢The recent market rhythm is extremely fast; being one step too slow can easily turn profits into losses.

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Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. Market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; asset performance should be comprehensively evaluated using other sources of information, and trading decisions should not be made solely based on this article. Please note that past performance is not indicative of future results.

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