Have you ever wondered what it feels like to catch a stock just as it’s about to soar? Picture this: you’re scrolling through market data, and one name keeps popping up with undeniable momentum. That’s exactly what’s happening with Alibaba (BABA) right now. The Chinese tech giant, long a powerhouse in e-commerce and cloud computing, is showing signs of a major breakout, and the charts are practically screaming opportunity. I’ve been tracking markets for years, and there’s something uniquely exciting about a stock like Alibaba hitting its stride. Let’s dive into why this tech titan is turning heads and what it could mean for investors in 2026.
The Bullish Case for Alibaba
Alibaba’s journey over the past few years hasn’t been a straight line. After hitting a low in late 2022, the stock has been quietly building a foundation for what could be a significant rally. The technical signals are aligning, and the broader market context—especially the rise of artificial intelligence—is giving Chinese tech stocks like Alibaba a fresh tailwind. But what exactly is driving this momentum? Let’s break it down.
A Rounded Bottom Signals a Turnaround
One of the most compelling signs for Alibaba is the rounded bottom formation on its chart. For those unfamiliar, this pattern looks like a gentle U-shape, indicating that selling pressure has faded and buyers are stepping in. It’s the kind of setup that gets technical analysts like me a little giddy. Since bottoming out in 2022, Alibaba has been carving out this pattern, suggesting a bullish turnaround phase. This isn’t just a blip—it’s a structural shift that could carry the stock higher for years.
Technical patterns like the rounded bottom are often precursors to sustained uptrends, especially when paired with strong fundamentals.
– Market analyst
The rounded bottom isn’t just a pretty picture on a chart. It reflects real-world factors: Alibaba’s resilience in navigating regulatory challenges in China, its growing cloud computing arm, and its dominance in e-commerce. These fundamentals are starting to resonate with investors, and the charts are catching up.
Long-Term Momentum Is Turning Positive
When you zoom out to the bigger picture, Alibaba’s long-term momentum is another reason to pay attention. Metrics like the monthly MACD (Moving Average Convergence Divergence) and the 12-month moving average are flashing green. For those who don’t speak chart lingo, the MACD is like a weather vane for momentum—it tells you whether the wind is blowing in favor of buyers or sellers. Right now, it’s pointing firmly upward for Alibaba.
Another key signal? Alibaba recently broke above the lower boundary of the monthly cloud model, a technical indicator that’s a bit like a crystal ball for long-term trends. This breakout is a bullish catalyst, suggesting the stock could have room to run. In my experience, when a stock clears this kind of hurdle, it’s often the start of something big.
The Correction Is Over—What’s Next?
Every stock needs a breather, and Alibaba was no exception. After a strong start to 2025, the stock hit a corrective phase in February. But here’s the good news: that pullback seems to be done. A fresh weekly MACD buy signal has emerged, marking a shift in intermediate-term momentum. This is the kind of signal that can spark a rally, and it’s got investors buzzing.
- Weekly MACD Buy Signal: Indicates rising momentum over the next few months.
- Fibonacci Retracement Target: The stock is eyeing a 38.2% retracement level near $155, a key milestone.
- Support Level: The 50-day moving average around $117 is acting as a solid floor.
Perhaps the most exciting part? Alibaba isn’t overstretched like some U.S. tech stocks. Its daily stochastics—a short-term momentum indicator—recently flipped from oversold to bullish after consolidating above the 50-day moving average. This setup screams “ready to rally,” with resistance from February near $143 as the next hurdle.
Why Alibaba Could Outperform the Market
Here’s where things get really interesting. Alibaba isn’t just holding its own—it’s poised to outperform the broader market. The ratio of Alibaba’s stock price to the S&P 500 shows a bullish pattern, with higher highs and higher lows supported by a rising 40-week moving average. In plain English? Alibaba is gaining ground against U.S. stocks, and this relative strength could extend into 2026.
This outperformance isn’t just about Alibaba. It’s part of a broader trend where Chinese tech stocks are starting to shine. The AI boom, which has fueled U.S. giants like Nvidia, is now lifting Chinese players like Alibaba, thanks to their investments in cloud computing and AI infrastructure. It’s like watching a sleeping giant wake up, and I can’t help but feel optimistic about what’s ahead.
Chinese tech is catching up to the AI wave, and companies like Alibaba are at the forefront of this shift.
– Tech industry expert
Short-Term Opportunities for Investors
If you’re a short-term trader, Alibaba’s setup is just as compelling. The stock’s near-term technicals are bullish, with room to climb before hitting resistance. Unlike some overhyped U.S. tech names, Alibaba’s chart isn’t screaming “overbought.” Instead, it’s in a sweet spot—consolidating healthily above key support levels and ready to push toward $143.
What does this mean for you? If you’re looking to capitalize on a quick move, the current setup suggests a near-term rally is on the horizon. But don’t just take my word for it—keep an eye on that 50-day moving average at $117. If it holds, the path to $143 looks clear.
Comparing Alibaba to the Broader Tech Sector
Let’s put Alibaba in context. While U.S. tech stocks have been the darlings of the AI bull market, Chinese tech is starting to steal the spotlight. Alibaba’s cyclical uptrend mirrors the strength seen in U.S. names, but with a key difference: it’s not as crowded. Many U.S. tech stocks are trading at sky-high valuations, while Alibaba still feels like a bargain with room to grow.
| Stock | Market | Valuation | Momentum |
| Alibaba (BABA) | Chinese Tech | Moderate | Bullish |
| U.S. Tech Giants | U.S. Market | High | Overstretched |
This table sums it up: Alibaba offers a compelling mix of value and momentum, making it a standout in the tech sector. It’s like finding a hidden gem in a crowded market.
Risks to Consider
No investment is a sure thing, and Alibaba is no exception. Regulatory risks in China remain a concern, though the company has navigated these waters better than many expected. Geopolitical tensions could also weigh on Chinese stocks, and a broader market pullback could drag Alibaba down with it. That said, the technical setup suggests these risks are outweighed by the bullish catalysts for now.
In my view, the key is to stay disciplined. Set a stop-loss below the 50-day moving average at $117 to protect your downside, and keep an eye on resistance at $143. If the stock breaks through, the next target at $155 could come into play quickly.
Why 2026 Could Be Alibaba’s Year
Looking ahead, 2026 feels like a pivotal year for Alibaba. The combination of long-term momentum, a favorable technical setup, and growing investor interest in Chinese tech makes BABA a stock to watch. Whether you’re a long-term investor or a short-term trader, the charts are telling a compelling story.
What’s my take? I’ve seen plenty of stocks come and go, but Alibaba’s setup feels different. It’s like a coiled spring, ready to pop. The AI boom, China’s tech resurgence, and Alibaba’s own fundamentals are aligning in a way that’s hard to ignore. Could this be the moment to jump in? That’s for you to decide, but the charts are making a strong case.
Alibaba’s story is still unfolding, but the signals are clear: this stock is on the move. From its rounded bottom to its bullish MACD signals, everything points to a potential breakout. Whether you’re chasing short-term gains or building a long-term portfolio, Alibaba deserves a spot on your radar. Keep watching those key levels—$117 for support, $143 for resistance, and $155 as the next big target. The tech world is shifting, and Alibaba might just be leading the charge.
