Massive Base-Accumulation Period for BABA (Proxy For China's Economic Health)

Good Morning, MPTraders!  April 11, 2023-- Pre-Market Update: Today's action might be all about tomorrow!  That is to say, all about tomorrow's pre-market release of the next round of CPI (March) inflation data... Perhaps the overnight release of China's inflation data is suggestive of what's ahead for the U.S.? After all, it IS STILL a global economy (even if geopolitical tensions are doing a fine job of sectioning global trade into blocs-- Dollar vs. Non-Dollar (YUAN) blocs). In any case, let's take a look... 

Beneath the data table, I have posted my 4-Hour Chart of BABA as a proxy for the health of the Chinese economy and market. Declining inflation certainly is a positive input for the Chinese economy, and by extension, BABA, which exhibits an increasingly constructive technical setup in the aftermath of its October 2022 low at 58.01. I can make a compelling argument that BABA has been in a massive base-accumulation period and pattern since February 2022 that has positioned the price structure in a second powerful upleg since last October that is exerting increasing upward pressure that is destined to revisit its intermediate-term upside breakout plateau from 121.30 to 129.50.

While I am not a fan of allocating capital (in any meaningful way) to Chinese equity names because of Xi's CCP penchant for intervening to exert control from time to time, all else being equal (for anyone willing and able to make a bet on this particular big cap name), as long as any BABA weakness is contained above 96.00, the technical setup is bullish, and perhaps so is China's influence on the global economy... Last in BABA is 101.90

(Courtesy of Trading Economics)... 

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