Alibaba Group Holding Limited (NYSE:BABA) Shares have surged this month as investors grow more optimistic about online spending in China

Alibaba Group Holding Limited (NYSE:BABA) Shares have surged this month as investors grow more optimistic about online spending in China

Alibaba Group Holding Limited (NYSE:BABA) Shares have surged this month as investors grow more optimistic about online spending in China

Shares of Alibaba and smaller rivals have surged in January, as investors grew more optimistic about online spending in China.What’s Happening

Alibaba, the Chinese e-commerce titan, jumped 6.3% to $166.82 in New York on Wednesday. The rally came after it reported a slower but still robust 41% rise in revenue for the quarter ended December, compared with a year earlier.

While quarterly revenue grew at its weakest pace since 2016 and modestly missed estimates, gross merchandise volume (GMV) – a key metric – grew at a solid 29 per cent and the company’s budding cloud business continued to show promise. 

Tech investors have fretted over the impact of a slowing Chinese economy and a crippling Sino-US trade war, which have been blamed for weak results at a slew companies including Apple Inc and chipmakers.

“Concerns about trade tensions might affect sentiment, but Alibaba’s exposure to the tangible effects of trade tariffs is small,” Alibaba’s Executive Vice-Chairman, Joe Tsai, said on a post-earnings call on Wednesday. 

“For our businesses in e-commerce, consumer services, entertainment and cloud computing, the primary growth driver is not exports but domestic consumption and corporate transformation.” 

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 151.82.

The projected upper bound is: 179.44.

The projected lower bound is: 158.03.

The projected closing price is: 168.74.

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 27 white candles and 23 black candles for a net of 4 white candles.

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.

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 85.5837. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 70.21. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 24 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 198.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 18 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 1.670 at 168.490. Volume was 26% above average (neutral) and Bollinger Bands were 28% wider than normal.

Open High Low Close Volume___
168.000 169.720 165.700 168.490 5,624,238

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

Moving Averages: 10-period 50-period 200-period
Close: 158.34 149.77 169.71
Volatility: 45 46 43
Volume: 4,226,227 4,310,611 4,309,818

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 is currently 0.7% 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 12 periods. Our momentum oscillator is currently indicating that BABA.N is currently in an overbought condition.

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