Alibaba Group Holding Limited (NYSE:BABA) fallen 10% from its recent record high

Alibaba Group Holding Limited (NYSE:BABA) fallen 10% from its recent record high

Alibaba Group Holding Limited (NYSE:BABA) fallen 10% from its recent record high

Alibaba Group Holding stock has fallen 10% from its recent record high as investors ditched it and shares of other Chinese companies amid an intensifying trade dispute. But options investors don’t seem to be fazed by the recent slump.

Weighing the final impact of any trade retaliatory measures is challenging. Tariffs can be specific and hard to predict or so wide-ranging as to disturb even swaths of the market like small-cap stocks that have remained isolated.

The uncertainty has meant the market has fluctuated between ignoring trade fights and appearing to rise and fall in line with headlines on tariffs. Even with the prospect of intensifying trade conflicts on Monday, the Shanghai Composite recorded its biggest one-day point gain since February, while the Dow Jones Industrial Average finished its best day in about a month.

On Wednesday, that quickly turned as stocks around the world sank, following President Donald Trump’s promise to slap an additional 10% tariff on $200 billion in Chinese goods spanning tech gear to furniture and handbags.

Amid the volatility, the Shanghai Composite entered bear-market territory—down by roughly 20% since January’s high—and major U.S. indexes remain unsettled.

Some say that it’s time to position for a rebound in the American depositary receipts of Chinese companies like Alibaba (ticker: BABA) or internet play Sina (SINA), which have slid over the past month, as earnings approach.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 200.34.

The projected lower bound is: 180.43.

The projected closing price is: 190.38.

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 24 white candles and 26 black candles for a net of 2 black candles.

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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 55.2709. This is not an overbought or oversold reading. The last signal was a sell 1 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 44.68. 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 24 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 20. This is not a topping or bottoming area. The last signal was a buy 6 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 0 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 2.750 at 190.170. Volume was 7% below average (neutral) and Bollinger Bands were 36% wider than normal.

Open High Low Close Volume___
190.790 192.580 189.790 190.170 3,515,402

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 188.71 197.05 185.83
Volatility: 30 32 38
Volume: 3,179,509 3,974,632 3,906,174

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 2.3% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of BABA.N (mildly bearish). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 13 periods.

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