Alibaba’s stock has been on a wild ride since early 2022, exhibiting steep uptrends that were followed by massive declines and vice versa. In the latest episode, the share price rebounded strongly from its 2023 retreat after news emerged concerning a potential strategic restructuring of the firm.

The momentum indicators currently suggest that the recent rebound was overstretched as both the RSI and the stochastic oscillator are coming down from their overbought territories. This loss of momentum is also evident in the chart, with the stock price falling slightly from its recent peak to find support at the 50-day simple moving average (SMA).

If the negative correction extends below the 50-day SMA, the recent support of 91.70, which overlaps with the 200-day SMA might be tested. Sliding beneath that floor, the price could descend towards 85.00 before the 2023 bottom of 79.20 appears on the radar. Even lower, the 69.00 support region could provide downside protection.

On the flipside, bullish actions may propel the price towards the recent rejection point of 104.70. Surpassing that zone, the bulls could aim for the 2023 high of 120.45. Further advances could then come to a halt at the July 2022 high of 125.50.

Overall, Alibaba’s stock spiked higher on positive fundamental news but pared some gains after reaching technically overbought conditions. Therefore, the outcome of the price’s test of the 50-day SMA will be critical for the direction of the next move.