Alibaba (BABA) Share Price Declines from 40-Month High

As shown in the Alibaba (BABA) share chart, the price reached a 40-month high this week, surpassing $145 per share.

Bullish sentiment is being fuelled by news related to AI prospects in China. According to media reports:
→ China’s AI spending is increasing through investments from state-owned enterprises, private companies, and local authorities, aiming to keep pace with the US $500 billion Star Gate project.
→ Alibaba plans to invest $52 billion over three years in artificial intelligence and cloud computing.

Technical Analysis of Alibaba (BABA) Shares

Despite a positive fundamental backdrop, the chart signals potential concerns:
→ The price is near the upper boundary of the ascending channel, which could act as resistance.
→ Bulls attempted to break the $145 level (which has acted as resistance since late February) on 17 March but failed, as the price could not hold above this mark.
→ Using your preferred oscillator, you are likely to observe a bearish divergence between peaks A and B.

This suggests that bullish momentum may be weakening, and investors could consider taking profits after Alibaba’s exceptionally strong price rally—up approximately 70% since early 2025. If so, a break below the orange trendline could lead to a correction towards the median of the blue channel.