Tuesday October 16th, 2018 by Mike Paulenoff BABA-- is up 3% today, and up 10% off of the 10/11/18 low at 135.14, in what is an oversold bounce within a still-dominant downtrend off of the 6/05/18 all time high at 211.70 into last week's low at 135.14. Last week's low neared our measured optimal downside target zone of 135 to 132 off of the massive 14 month top formation (see attached chart) that broke down during the third week of Sep. from the 166 area. Let's notice that last week, BABA spiked down beneath the lower boundary line of its June-Oct. bearish price channel, which represented a 6.5% negative (downside) overshoot of the lower boundary line. Typically, it takes about a 3% overshoot of a channel boundary line to trigger extreme "elastic reversal signals" that argue for a counter-trend price reaction that in this case, propelled BABA back up into the confines of the down channel. BABA upside continuation will smack into resistance at 150 initially, which if hurdled and sustained, will point to 153.00-156.50 next, a zone from where my work will be expecting BABA to stall and then to roll over again into another bout of weakness that will be vulnerable to a retest of the 10/11 low at 135.14. Only a sudden resolution to the US-China trade dispute will provide the necessary power needed by BABA to thrust through heavy resistance from 153 to 170. In that President Trump and President Xi are not expected to meet again (possibly) until next month's G-20 Summit (Nov. 30 to Dec.1) in Buenos Aires, Argentina, we have to consider that if the two leaders actually schedule a meeting, that some agreements will have been ironed-out ahead of time. Whether or not any US-China trade agreements are hammered out earlier, ahead of the Nov. mid-term US elections, also remains to be seen. In the meantime, current strength is viewed as a recovery rally within an incomplete bearish, top building technical set up. Last is 149.01/02Mike Paulenoff is author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial! * I really like Mike's charts and analysis. This is shared with my readers here via MPtrader.com *Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal. If you liked this article, please click the LIKE (thumbs up) button. Feel free to leave any comments, question, or opinions. Follow us and check back occasionally for additional articles or comments.