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Is Alibaba (BABA - Get Report) stock a buy as we near Singles Day?

Nov. 11 in China marks a massive annual shopping event that results in a surge in sales volume for Alibaba, JD.com (JD - Get Report) and other Chinese e-commerce players. It's not unlike Amazon's (AMZN - Get Report) Prime Day, a midsummer online sales event that's since drawn in other retailers.

Under normal conditions, Alibaba stock would display bullish momentum as we near the event. As it happens, the stock is doing just that, even though we're navigating abnormal conditions.

Those abnormal circumstances stem from the U.S.-China trade war. While tensions lately have softened, investors are still hanging on every trade-related headline, rumor and tweet from President Donald Trump.

So where does that leave Alibaba stock? To get our answer, we'll need to turn to the technicals and take a look at the charts.

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Trading Alibaba Stock

Daily chart of Alibaba stock.
Daily chart of Alibaba stock.

A glance at the one-year daily chart shows that Alibaba stock has been trading pretty well lately. The post-earnings reaction was mixed when the company reported on Nov. 1, but the shares have since found some upside momentum.

Over the past several months, Alibaba has been repeatedly rejected by the $180 level. Worth pointing out is that the 78.6% retracement at $181.61 was acting as an additional layer of resistance.

But each rejection dating back to May has resulted in a more and more shallow decline. This setup -- where rising uptrend support pushes up a stock against a static level of resistance -- is known as an ascending triangle. It's a bullish formation, with traders ultimately looking for a breakout over resistance.

Bulls this month got their wish, as the shares burst through $180 and have now stalled near $188. This level was resistance in March and April, before Alibaba stock aggressively broke out over this mark.

The timing was unfortunate, though, as trade tensions quickly increased and sent many stocks lower -- BABA included.

So what's the trade? Keep it simple. Over $188 and Alibaba stock could be heading for $190 or higher. Over $190 puts the May high of $195.72 on the table.

On a pullback, it would be very constructive to see former resistance at $180 hold as support.

Bulls can consider buying on a breakout or on a pullback into support, whichever they are more comfortable with, if either.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.