Alibaba Group Holding Limited (NYSE:BABA) concerns about e-commerce sales trending below expectations

Alibaba Group Holding Limited (NYSE:BABA) concerns about e-commerce sales trending below expectations

Alibaba Group Holding Limited (NYSE:BABA) concerns about e-commerce sales trending below expectations

Several Wall Street analysts cut their price targets on Alibaba (BABA) stock Wednesday, based on concerns about e-commerce sales trending below expectations and the impact of aggressive investments on profit margins.

Alibaba stock closed at 138.29, down 5.9%, on the stock market today. Shares now trade near a 15-month low. Alibaba stock has dropped 34% since hitting a record high of 211.70 on June 5 amid an escalating trade war between the U.S. and China. There also are signs of slowing economic growth in its home market.

Alibaba Group Holding Ltd shares fell $3.47 (-2.51%) in premarket trading Thursday. Year-to-date, BABA has declined -19.80%, versus a 5.65% rise in the benchmark S&P 500 index during the same period.

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 168.13.

The projected upper bound is: 151.21.

The projected lower bound is: 130.86.

The projected closing price is: 141.03.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.

A piercing line occurred (which indicates that prices moved down on the previous bar, opened even lower, but then closed significantly higher). This implies strength as the momentum appears to be shifting from the bears to the bulls. Note that the higher the close of the white candle (relative to the black candle), the more bullish the Piercing Line pattern.

Momentum Indicators

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 10.8862. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 21 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 29.58. This is where it usually bottoms. 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 buy 22 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 -150.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 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 sell 4 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 3.610 at 141.900. Volume was 85% above average (neutral) and Bollinger Bands were 42% wider than normal.

Open High Low Close Volume___
136.450 142.900 136.060 141.900 8,141,916

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 153.84 167.11 183.62
Volatility: 45 40 40
Volume: 5,085,018 5,100,819 4,148,368

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 22.7% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 7 periods. Our momentum oscillator is currently indicating that BABA.N is currently in an oversold condition.

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