Alibaba Group Holding Limited (NYSE:BABA) Sets Up for Another Rally
Shares of Alibaba Group (NYSE:BABA) have largely trotted sideways over the past couple of weeks. The charts however now point out that BABA stock is setting up for another leg higher.
For the year-to-date, BABA stock thus far is higher by close to 20%. The stock however had almost identical year-to-date performance by late January/early February before slipping into a new consolidation phase. Given the underlying growth story that very much remains in place with Alibaba, to yours truly the longer this stock consolidates in an orderly sideways manner the better the odds of a meaningful next leg higher become.
To be clear, BABA stock can be a volatile creature in the short term. Over the years, however, I have learned not to fight the broader trends in strongly trending growth stocks.
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 195.43.
The projected upper bound is: 211.29.
The projected lower bound is: 194.20.
The projected closing price is: 202.75.
A black body occurred (because prices closed lower 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 28 white candles and 22 black candles for a net of 6 white 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 42.5148. This is not an overbought or oversold reading. The last signal was a sell 4 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 50.47. 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 10 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 -125.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 10 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 6 period(s) ago.
Rex Takasugi – TD Profile
ALIBABA GRP ADR closed down -4.020 at 202.210. Volume was 28% below average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
205.840 206.000 201.040 202.210 2,735,534
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 206.68 193.37 184.81
Volatility: 27 28 37
Volume: 4,364,496 3,777,942 3,974,811
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 9.4% above its 200-period moving average and is in an upward 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 bullish on BABA.N and have had this outlook for the last 33 periods.