Alibaba Group Holding Limited (NYSE:BABA) earnings won’t convince most risk-averse investors to buy BABA stock
The perception of Alibaba (NYSE:BABA) can diverge dramatically among educated investors. Some believe that BABA stock is a cornerstone of any portfolio, while others say that Alibaba stock is a sign of a market run amok.
The bulls’ view on BABA stock is rather simple: Alibaba is the unquestioned e-commerce leader in China.T hat’s a market with a population nearing 1.4 billion people. Millions of those citizens are moving into the middle class – and into Alibaba’s sweet spot – every month.
The bears’ view is just as simple, however. China remains a Communist country. Given that fact alone, investors could logically decide not to own any Chinese stocks, let alone one valued at nearly US$400 billion. BABA stock carries many risks, one of which is the fact that BABA shareholders don’t actually own shares of the company.
The argument between the supporters and detractors of BABA stock isn’t going to end any time soon – and certainly not ahead of Alibaba’s fourth-quarter earnings, which are due to be reported next week. Personally, I’ve long leaned towards the skeptical side when it comes to BABA stock. Investors can logically disagree – again, this is a stock whose beauty is somewhat in the eye of the beholder – but those who do should at least understand the risks posed by BABA stock.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 169.86.
The projected lower bound is: 149.14.
The projected closing price is: 159.50.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 5 rising windows in the last 50 candles–this makes the current rising window even more bullish.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 57.1478. This is not an overbought or oversold reading. The last signal was a sell 3 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 63.69. 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 20 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 152.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 buy 14 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed up 3.350 at 159.210. Volume was 14% below average (neutral) and Bollinger Bands were 23% wider than normal.
Open High Low Close Volume___
159.000 160.490 157.440 159.210 3,830,905
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 153.85 148.67 169.94
Volatility: 33 45 43
Volume: 3,529,913 4,296,952 4,259,791
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
ALIBABA GRP ADR is currently 6.3% below its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into BABA.N (mildly bullish). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 8 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.