Alibaba Group Holding Ltd (NYSE:BABA) Loses No Sleep Over Amazon Competition

Alibaba Group Holding Ltd (NYSE:BABA) Loses No Sleep Over Amazon Competition

Alibaba Group Holding Ltd (NYSE:BABA) Loses No Sleep Over Amazon Competition

  • Word of Amazon.com Inc. (AMZN) entering a new market usually sends shudders through the local retail and online shopping worlds, but Alibaba Group (BABA), the Chinese ecommerce giant, isn’t losing any sleep over its rival’s impending push into Southeast Asia.
  • With expectations surging that Amazon will enter the region soon, Alibaba’s Lazada thinks it will maintain an edge that will prevent Amazon from disrupting the marketplace similar to what it has done elsewhere. It’s no surprise the U.S. ecommerce giant would set it sights on Southeast Asia.
  • It has a growing number of internet users who are starting to embrace online shopping. A report from Google and Temasek Holdings, the Singapore investment firm, forecasts the internet economy in Southeast Asia to increase to $200 billion by 2025, driven in a big part by ecommerce.
  • Luxury sales in China are expected to increase between 6% and 8% this year, presenting a big opportunity for ecommerce giant Alibaba Group (BABA) and rival Tencent.
  • Thanks in part to increasing discretionary spending on the part of Chinese consumers, easy access to credit and a weaker yuan​, luxury sales have been picking up all year long. That growth is expected to continue with Bain Capital predicting a 6% to 8% increase in China this year, reported The Wall Street Journal.
  • Alibaba Group Holding (BABA) reached $150 for the first time Thursday in what is proving to be the stock’s breakout year.
  • The U.S.-traded shares were up 0.5% in recent trading at $149.69, before retreating by 0.5%. But the all-time high is noteworthy for a company that went public at $68 in 2014; the stock is up nearly 70% this year. The iShares China Large-Cap ETF (FXI) was up fractionally in recent trading.

Alibaba Group Holding Limited is a holding company. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People’s Republic of China (China) and internationally. Its businesses consist of core commerce, cloud computing, mobile media and entertainment, and other innovation initiatives. Through investee affiliates, it also participates in the logistics and local services sectors. Retail commerce in China operated by the Company includes the China online commerce destination (Taobao Marketplace); the China third-party platform for brands and retailers (Tmall), and the sales and marketing platform for flash sales (Juhuasuan). Wholesale commerce in China operated by the Company includes the China domestic wholesale marketplace (1688.com) and the wholesale marketplace for global trade (Alibaba.com).

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 161.32.

The projected lower bound is: 143.75.

The projected closing price is: 152.54.

ALIBABA GRP ADR closed up 2.310 at 151.830. Volume was 19% below average (neutral) and Bollinger Bands were 20% wider than normal.

Open          High            Low             Close          Volume
150.120      152.250      149.690      151.830      11,469,369

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period       50-period        200-period
Close:                      145.14              132.38              108.92
Volatility:               24                     42                     30
Volume:                 11,820,872      18,177,948      12,826,053

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

ALIBABA GRP ADR is currently 39.4% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into BABA.K (mildly bullish). Our trend forecasting oscillators are currently bullish on BABA.K and have had this outlook for the last 81 periods. Our momentum oscillator is currently indicating that BABA.K is currently in an overbought condition.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 95.3196. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 74.04. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 10 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 192.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 21 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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