Alibaba Group Holding Limited (NYSE:BABA) maintaining its lead in the e-commerce market

Alibaba Group Holding Limited (NYSE:BABA) maintaining its lead in the e-commerce market

Alibaba Group Holding Limited (NYSE:BABA) maintaining its lead in the e-commerce market

Alibaba’s marketplaces currently control 55.9% of China’s e-commerce market, according to eMarketer. Its closest rival, JD.com (NASDAQ: JD), claims a 16.7% slice.

Alibaba maintains that lead with four major marketplaces: its consumer-to-consumer platform Taobao, its business-to-consumer platform Tmall, its business-to-business platform Alibaba.com, and its overseas platform AliExpress.

Taobao and Tmall are the main growth engines of Alibaba’s “core commerce” business, which grew its revenue 51% last year and accounted for 86% of its top line. Unlike JD, Alibaba only generates revenue from transaction fees, instead of taking on inventories or handling logistics. That capital-light strategy enables the core commerce business unit to remain firmly profitable, unlike Alibaba’s other business units.

The number of mobile monthly active users (MAUs) across all of Alibaba’s marketplaces rose 3% sequentially to 721 million last quarter. Meanwhile, the Economic Intelligence Unit expects China’s middle class to grow from 10% of the population in 2015 to 35% by 2030, which should boost the spending power of Alibaba’s average online shopper as its MAU growth decelerates.

In other words, Alibaba’s core commerce business should easily keep generating double-digit sales growth over the next five years. Alibaba will also keep feeding that growth by expanding into new markets like Southeast Asia, Russia, India, and Latin America.

Still a great, but imperfect, play on China’s growth

Alibaba remains one of the best long-term plays in China. It faces near-term challenges from JD and Tencent, but it will likely remain the 800-pound gorilla in the country’s e-commerce and cloud markets for the foreseeable future. As long as Alibaba keeps growing those two core businesses, and considers divesting its media streaming and movie-making businesses, its stock should continue rising over the next five years.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 169.56.

The projected upper bound is: 185.84.

The projected lower bound is: 168.26.

The projected closing price is: 177.05.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 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 74.1530. This is not an overbought or oversold reading. The last signal was a sell 0 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 59.87. 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 38 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 82. 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 8 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -1.720 at 177.020. Volume was 0% below average (neutral) and Bollinger Bands were 30% narrower than normal.

Open     High      Low     Close     Volume___
178.480 179.870 175.350 177.020 3,686,367
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 175.86 165.48 164.12
Volatility: 18 34 42
Volume: 3,429,316 4,229,167 3,877,125

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 7.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on BABA.N and have had this outlook for the last 27 periods.

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