Alibaba (BABA) is showing a sharp rebound after completing a five-wave bearish impulse, suggesting that the stock may have reached a temporary bottom. However, before the broader downtrend resumes, we could see a three-wave ABC corrective recovery toward the 145–146 resistance zone. The key invalidation level remains at 192. At the same time, the Hang Seng Index (HSI) has also staged a strong recovery after completing an ABC correction within wave 4, leaving room for a potential continuation higher in wave 5 toward previous highs. However, the 28,000–30,000 area could act as a major resistance zone.
Once Alibaba reaches its projected resistance and the Hang Seng Index approaches the 28,000–30,000 region, we could see conditions for a larger bearish reversal developing.
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