Alibaba Group Holding Limited (NYSE:BABA) reported earnings for the fiscal third quarter that beat expectations

Alibaba Group Holding Limited (NYSE:BABA) reported earnings for the fiscal third quarter that beat expectations

Alibaba Group Holding Limited (NYSE:BABA) reported earnings for the fiscal third quarter that beat expectations

Alibaba shares soared after the company reported market-beating earnings in the three months ended December, with investors content with a record amount of spending by the company in the 2018 calendar year, hoping that it will spur future growth.

The Chinese e-commerce giant posted its slowest revenue growth since 2016in its fiscal third quarter, but net income beat estimates. The stock closed more than 6 percent higher in New York on Wednesday and edged up further in after-hours trading.

It has had to contend with a slowing Chinese economy and the ongoing U.S.-China trade war. One area the market was focused on is spending by the company, with some analysts thinking that Alibaba could reign in expenditures because of the tougher operating environment.

But the company ended up spending a record amount in 2018 — something that the market was happy with. Over 278.8 billion yuan, or $41.6 billion, was spent on product development, sales and marketing, general administration and cost of revenue last year, a 86.2 percent increase in renminbi terms from 2017, when the company splashed out 149.7 billion yuan.

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 151.21.

The projected upper bound is: 178.09.

The projected lower bound is: 156.21.

The projected closing price is: 167.15.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.

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 83.0127. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 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 68.96. 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 23 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 206.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 17 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 9.940 at 166.820. Volume was 60% above average (neutral) and Bollinger Bands were 26% wider than normal.

Open High Low Close Volume___
161.000 167.830 160.500 166.820 7,141,358

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

Moving Averages: 10-period 50-period 200-period
Close: 156.97 149.52 169.74
Volatility: 46 47 43
Volume: 4,010,807 4,323,714 4,292,500

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 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 1.7% below its 200-period moving average and is in an upward trend. Volatility is 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 11 periods.

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