Alibaba Group Holding Limited (NYSE:BABA) riding a rocky road lately
Alibaba (NYSE:BABA) has been in the spotlight lately amid constant trade war headlines and some investors have thrown BABA stock in the gutter as a result, but now might be the time for investors to take a second look.
The company recently reported yet another quarter of close to triple-digit growth in the cloud segment. The cloud business grew from RMB 2,975 million to RMB 5,667 million or $825 million in the latest quarter. This has increased the revenue on an annualized basis to over $3 billion.
Alibaba CEO Daniel Zhang mentioned in a CNBC interview that in the future, the cloud computing business would be the “main business” of BABA. And Alibaba stock should gain a strong tailwind as the cloud segment delivers better margins in the next few quarters.
BABA Stock and the Long Road Ahead
The growth potential within the cloud segment is immense. BABA has a number of advantages in this segment. Chinese regulators do not allow international companies to set up independent cloud business within China. This reduces the competitive field for Alibaba. It is only competing against Tencent (OTCMKTS:TCEHY) and Baidu (NASDAQ:BIDU) for cloud customers within China. BABA already has a close relationship with thousands of small enterprises through its commerce platform. Hence, it becomes easier for the company to develop cloud business from a client-centric perspective.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 172.21.
The projected lower bound is: 146.57.
The projected closing price is: 159.39.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 94.0921. 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 59.30. 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 32 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 140.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 buy 19 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed up 2.880 at 159.340. Volume was 14% below average (neutral) and Bollinger Bands were 18% narrower than normal.
Open High Low Close Volume___
159.110 159.800 155.260 159.340 4,126,102
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 152.78 151.08 177.14
Volatility: 44 56 43
Volume: 4,198,341 4,521,563 4,166,918
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 10.1% 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 9 periods.