The internal structure of BABA shares suggests the formation of a global correction pattern. In fact, this takes the form of a cycle triple zigzag w-x-y-x-z.
At the time of writing, the price is in the final part of the specified pattern. There is a complete actionary wave y, which has the form of a primary double zigzag Ⓦ-Ⓧ-Ⓨ, as well as an intervening wave x.
The initial part of the final actionary wave z is currently forming, and it could be a primary standard zigzag Ⓐ-Ⓑ-Ⓒ.
The development of the primary wave Ⓐ in the form of an intermediate impulse is imminent. Following that, after a slight correction Ⓑ, the stock may continue to fall in the impulse wave Ⓒ to 22.76. At that level, cycle wave z will be at 50% of wave y.
Let’s consider the second scenario, where the formation of the cycle intervening wave x is not yet fully complete. That said, it may have a longer internal structure.
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Wave x may take the form of a simple 3-wave zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree. Perhaps the impulse and correction have already been built. In the near future, the stock price may rise in impulse Ⓒ towards the level of 150.22.
The target is determined using the Fibonacci line tool. At that level, wave x will be at 38.2% of wave y. Lastly, after the full completion of the cycle wave x, the price of quotations in wave z could decrease below the minimum of 73.39.
Article by Orbex
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