Stock market rally is halted, traders look for bullish opportunity

The rally in the stock market experienced bearish reactions after a new record high. The upward movement has stopped for now and a bearish correction is due. As the overall trend is bullish, traders better avoid shorting the stock market. It is better to wait at a lower level for a chance to add more long positions. Moreover, the U.S. election is looming and we might see further upside in the stock market after the results.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index made a bearish close yesterday which might confirm the bearish correction phase. The index might continue the bearish movement toward 41,000 – 41,500 levels where traders could wait for bullish reactions. When the index forms bounce reactions near the support levels, traders could continue adding more long positions at a lower level.

Alibaba Group Holding (BABA)

BABA share prices rallied above $100.00 and reached as high as $117.82 before retracing. The share prices moved below the $100.00 level yesterday and there are no bullish reactions yet. If the share prices continue lower then traders could wait near 50% Retracement level for bullish reactions. The area between 50% Retracement and $100.00 could be used as a place to add long positions.