Alibaba Group Holding Limited (NYSE:BABA) reported an earnings beat in its fiscal third quarter Jan. 30, just one day after its home country saw a “day of disaster” for earnings

Alibaba Group Holding Limited (NYSE:BABA) reported an earnings beat in its fiscal third quarter Jan. 30, just one day after its home country saw a “day of disaster” for earnings

Alibaba Group Holding Limited (NYSE:BABA) reported an earnings beat in its fiscal third quarter Jan. 30, just one day after its home country saw a “day of disaster” for earnings

Chinese e-commerce platform Alibaba Group Holding Ltd (NYSE: BABA) reported an earnings beat in its fiscal third quarter Jan. 30, just one day after its home country saw a “day of disaster” for earnings, according to Bloomberg. Here’s how the Street reacted.

The Analysts

Bank of America Merrill Lynch’s Eddie Leung maintains a Buy rating on Alibaba with a price target lowered from $221 to $215.

UBS’ Jerry Liu maintains at Buy, price target lifted from $200 to $210.

Raymond James’ Aaron Kessler maintains at Strong Buy, price target lifted from $260 to $285.

Bank Of America: The Details

Alibaba’s earnings report showed 41-percent year-over-year revenue growth to RMB117.3 billion, which was 1.7-percent short of consensus estimates due to contra-revenues related to online-to-offline subsidies, Leung said in a note.

By category, Chinese commerce retail revenue including new retail rose 35 percent; international retail rose 23 percent; consumer services revenue was up 3 percent from the prior quarter; and cloud/media/video growth decelerated from 91 percent last quarter to 84 percent.

Overall the earnings report reinforces the bullish case for the stock, which is based on the belief Alibaba will be a key beneficiary from stabilization of China’s domestic consumption market and ongoing strategic initiatives that can open up large potential new markets, according to BofA. 

UBS: More Bullish Stance

Unlike prior earnings reports, the Street is likely to move its Alibaba estimates higher due to “slightly better” Chinese commerce retail revenue growth and improved losses from Youku, Liu said in a research report. Alibaba’s tone also sounded “more positive,” which bodes well, as the analyst is modeling for an acceleration in EBITDA growth from 12.7 percent in fiscal 2019 to 26 percent in fiscal 2020.

Raymond James: 3 Positives Outweigh 2 Negatives

Kessler’s shared three main takeaways from Alibaba’s earnings report: 

“Solid” marketplace core commerce revenue growth of 27 percent year-over-year and marketplace commerce EBITA growth of 31 percent.

Chinese retail annual active customers rose 23 percent to 636 million, while mobile monthly active users rose 21 percent.

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 153.03.

The projected upper bound is: 177.52.

The projected lower bound is: 156.56.

The projected closing price is: 167.04.

Candlesticks

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 28 white candles and 22 black candles for a net of 6 white candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 3 falling windows in the last 50 candles–this makes the current falling window even more 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 85.9287. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 66.91. 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 1 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 110.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 20 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -1.270 at 166.700. Volume was 66% below average (consolidating) and Bollinger Bands were 7% wider than normal.

Open High Low Close Volume___
166.160 167.540 165.670 166.700 1,487,367

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

Moving Averages: 10-period 50-period 200-period
Close: 160.50 150.39 169.58
Volatility: 46 45 43
Volume: 3,773,267 4,225,503 4,299,994

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 gapped down today (bearish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
ALIBABA GRP ADR is currently 1.7% below 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 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 14 periods.

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