Alibaba Group Holding Limited (NYSE:BABA) Dips More Than Broader Markets: What You Should Know

Alibaba Group Holding Limited (NYSE:BABA) Dips More Than Broader Markets: What You Should Know

Alibaba Group Holding Limited (NYSE:BABA) Dips More Than Broader Markets: What You Should Know

The 10th of September was a day that some holders of Alibaba (NYSE:BABA) stock were dreading: Jack Ma, the company’s flamboyant co-founder and chairman for 20 years, finally stepped down from his position on his 55th birthday. He’ll continue to serve as as part of the 36-member Alibaba Partnership, but his influence at the company will be comparatively limited.

Today, Ma is worth an estimated $40 billion and Alibaba is a massive force in global e-commerce — not too shabby for a start-up that began in a tiny apartment in the late 1990’s.

Hold On to Your BABA Stock

It’s tempting to panic in situations like this as markets don’t like uncertainty and change can be scary. I would recommend a calm mindset and a long-term view, however, as Alibaba Group remains a solid, stable company even as it navigates its transition in leadership.

Granted, Alibaba’s reputation was, to a certain extent, predicated upon the cult of personality that Ma instilled in BABA shareholders. A bit of a wild card, Ma made an appearance in a kung-fu film, showed up at a get-together dressed like Michael Jackson, and even sang at a large music festival. During interviews he spoke frankly and charmed practically everyone he came in contact with.

Along the way, Ma helped cement Alibaba’s place in history, as the company’s IPO in 2014 was and still remains the largest IPO in stock-market history — $25 billion in American currency. Moreover, Alibaba reportedly had three times the sales of American e-commerce rival Amazon (NASDAQ:AMZN) last year.

Thus, it’s easy to see the parallels between Alibaba stock and Amazon; just imagine the shock and alarm that AMZN shareholders would feel if Jeff Bezos stepped down. And yet, I have no doubt that any downward price action in Amazon stock would be temporary; the same could be said regarding BABA stock, in my estimation.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 170.06.

The projected upper bound is: 187.06.

The projected lower bound is: 167.23.

The projected closing price is: 177.15.

Candlesticks

A black body occurred (because prices closed lower than they opened).
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 22 white candles and 28 black candles for a net of 6 black candles.

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 71.6364. This is not an overbought or oversold reading. The last signal was a sell 4 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 56.06. 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 buy 28 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 56. This is not a topping or bottoming area. The last signal was a sell 0 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 10 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -2.100 at 177.070. Volume was 32% below average (neutral) and Bollinger Bands were 32% narrower than normal.

Open     High      Low     Close     Volume___
178.000 179.170 175.370 177.070 2,490,379
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 176.57 170.89 168.06
Volatility: 26 38 38
Volume: 1,693,700 2,915,675 3,510,787

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 5.4% 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 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 17 periods.

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