Alibaba Group Holding Limited (BABA) shares have more than doubled since the beginning of the year, but traders may be having a shopping hangover following a record-breaking Singles' Day. On Nov. 11, the company reported sales that hit a record 168.2 billion yuan – or $25.4 billion – making it the world's biggest shopping event. However, Alibaba shares have retreated during the two sessions since Singles' Day as traders have sold the news.

In addition to a strong Singles' Day, Alibaba has impressed the market with strong financial performance in recent months. Third quarter revenue rose 60.7% to $8.29 billion – beating consensus estimates by $440 million – while earnings per share of $1.29 beat consensus estimates by $0.26 per share. While core commerce remains the biggest segment with revenue of $6.98 billion, cloud computing was the fastest growing at a 99% growth rate. (See also: Alibaba Singles' Day Sales Jump 39% to $25B.)

Technical chart showing the performance of Alibaba Group Holding Limited (BABA)

From a technical standpoint, the stock broke down from prior reaction highs to near its pivot point at $179.53. The relative strength index (RSI​) moved lower to neutral levels of 51.33, while the moving average convergence divergence (MACD​) could be on the verge of a bearish crossover. If the MACD crosses over, traders could see the start of a prolonged downtrend, particularly if key support levels at the 50-day moving average and pivot point are broken.

Traders should watch for a rebound from the pivot point at $179.53 toward the upper end of its price channel at R1 resistance around $190.48. If the stock breaks down from these key support levels, traders could see a move down to S1 support at $73.94 or even a move to S2 support at $162.99. The stock's significant rally means that traders should maintain a bullish bias on Alibaba and treat the current move lower as a short-term consolidation. (For more, see: Alibaba Beats on Q2 Earnings, Revenues Increase Y/Y.)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.

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