RSI reached 93.2 within
$BABA 4 hours—an extremely overbought level. I’ve written about this spot many times.
The stock sold off from 90 and then, in one push, surged to 122. A 35% gain over 30 days.
Look at the K-line structure. After bottoming at 90.66 on the daily chart, it went through a smooth rebound. It then consolidated around 112–115 for nearly a week. Last night, it broke out on high volume and directly drove all the way to the prior high at 122. Volume was 9.7 times the daily average. This isn’t something retail traders can do.
On the 4-hour timeframe: EMA9 (118.07) > EMA21 (116.96) > EMA50 (115.70)—a perfect bullish alignment. Price is hugging EMA9 upward, with almost no meaningful pullbacks. After the MACD golden cross, the histogram keeps expanding, so bullish momentum is still there.
But what does RSI 93.2 mean? It means that over the past 14 4-hour candles, bullish candles nearly crush bearish ones. This kind of extreme reading historically rarely sustains for more than 3–4 K-lines. Either it goes sideways to digest, or it pulls back.
Fund flow: Mark price 121.97 vs index price 121.62, with a premium of 0.35. The funding rate is 0.135%—somewhat high, but not outrageous. It shows crowding among the longs is increasing, but it hasn’t reached the liquidation edge.
Key levels:
- Resistance: 122 (the prior high just touched), 125 (the round-number level)
- Support: 118.8 (near EMA9), 117 (top of the consolidation zone before the breakout), 115 (the heavy-trade volume area)
- Strong support: 113 (the breakout starting point this leg)
I’ve seen this kind of move too many times. After breaking out above the prior high on volume, the probability is high that the first pullback to 118–117 will come. Whether it can keep charging depends on the trading volume and order follow-through during the pullback. A pullback on shrinking volume is a healthy adjustment. If it dumps on expanding volume, be careful.
Nini’s plan:
Current price: 121.99
Direction: slightly bearish (short-term pullback gamble)
Execution condition: wait for a 4H close with a long upper wick or a bearish candle engulfing a bullish one to confirm momentum exhaustion
Entry zone: 120–122
Stop-loss: 123.5 (accepting it’s wrong if it breaks above the prior high by more than 3%)
Targets: 118 → 117 → 115
My take: the uptrend hasn’t broken, but the short-term overbought is way too aggressive. Chasing longs from this level has terrible risk-reward. I’ll wait for a pullback toward 117–118 and decide whether to follow the long based on how it holds up. Going short now is “eating the meat of a pullback,” not “eating the meat of the trend.”
When it’s gone up too much, it will drop. When it’s dropped too much, it will rise. The old saying is always relevant. With your current position, can you sleep at night?
#BABAUSDT #BABA #超买信号 #Chinese concept stocks