Alibaba Group Holding Limited (NYSE:BABA) releases its earnings report on November 2nd
E-commerce giant Alibaba (BABA) releases its earnings report on November 2nd amid a rocky economic and political environment that is bogging down China. Concerns over trade wars have taken a toll on the stock as well (decelerated about 24% year-to-date).
Despite all this, Baird top analyst Colin Sebastian reiterates an Outperform rating for the stock with a price target of $215, showing nearly 63% upside. Sebastian suggests there is optimism to be felt about the company’s long-term growth trajectory due to investments in new retail, cloud computing, and digital media.
Though data revealing China’s consumer market shows it is slumping a bit, Sebastian says now is a good time to capitalize on China’s burgeoning middle class as online shopping, delivery services and online entertainment are growing and monetizing.
“The company continues to emphasize innovation and share gains in the enterprise technology/cloud market, adding to the midterm pressures on margins, largely driven by passing technology cost savings on to customers. Given the increasingly tough competitive landscape (including a growing cloud emphasis from Tencent), we anticipate BABA will continue to prioritize investments in infrastructure and platform services. Moreover, we expect continued aggressive investments in content creation and licensing to support growth of digital media assets,” Sebastian said.
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 162.84.
The projected upper bound is: 147.66.
The projected lower bound is: 123.40.
The projected closing price is: 135.53.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.
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 28.3784. This is not an overbought or oversold reading. The last signal was a buy 12 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 37.84. 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 12 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 -192.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed up 2.950 at 136.330. Volume was 2% above average (neutral) and Bollinger Bands were 10% wider than normal.
Open High Low Close Volume___
132.460 136.370 130.060 136.330 4,594,094
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 142.53 158.48 180.99
Volatility: 66 51 43
Volume: 4,505,863 4,940,957 4,242,248
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 is currently 24.7% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 20 periods.
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