Alibaba Group Holding Limited (NYSE:BABA) Buy on Dips
Sunday night, S&P futures fell off a cliff, foretelling Monday morning doom. President Trump tweeted Sunday that there will likely be more tariffs coming this Friday. And the talks between China and the U.S. have apparently taken a step backward.
Surprisingly, the Monday session was stronger than it should have been. We saw a sharp bounce off the morning lows and some stocks even closed green. So traders are still playing chicken with the headlines. The tariff talk hiccups affect some stocks more than others. Alibaba (NASDAQ: BABA ) is one that is squarely in the line of fire. BABA stock closed Monday down almost 4% and that’s even after a $3 bounce off the overnight low. This morning, it’s revisiting those lows.
The opportunity today is that BABA stock is one to own for the long term, regardless of these headlines here. So these dips are buyable.
While the short-term price action is violent, it should not affect BABA’s long-term bullish thesis. This is a company that is China-centric and not so much dependent on the commerce between two nations.
Even then, Alibaba has too much momentum going for it to let one feud kill its prospects forever. BABA’s management team has proven itself worthy of its reputation as they have delivered on promises for years and they will continue to do so for many more to come.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 190.06.
The projected lower bound is: 172.72.
The projected closing price is: 181.39.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 44.0623. This is not an overbought or oversold reading. The last signal was a sell 16 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 44.26. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 43 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 -184.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed down -6.810 at 181.430. Volume was 48% above average (neutral) and Bollinger Bands were 50% narrower than normal.
Open High Low Close Volume___
186.010 186.450 179.650 181.430 4,414,983
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 187.77 183.58 165.46
Volatility: 38 30 43
Volume: 2,996,210 2,759,706 3,989,542
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.
ALIBABA GRP ADR is currently 9.7% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 12 periods.