Don't chase Chinese stocks at these levels, traders warn as Alibaba hits all-time high $BABA (via TradingNation)
"It's the most overbought it's been since 2014, even more overbought than its all-time high in 2016," Maley said. Chart analysts typically interpret overbought conditions as signs that the underlying stock or index could be prime for a pullback.
He added that while Alibaba looks overbought on a near-term basis, its chart suggests it could continue its rise over the long term."The stock had formed what's called an ascending wedge. That's actually usually a bearish pattern. When you break below it, it sends up a big red flag," Maley said. "But this time, it's broken above it, and not only above it, but well above it.
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