Alibaba Group Holding Limited (NYSE:BABA) Stock Features Enticing Fundamentals

Alibaba Group Holding Limited (NYSE:BABA) Stock Features Enticing Fundamentals

Alibaba Group Holding Limited (NYSE:BABA) Stock Features Enticing Fundamentals

The direction of Alibaba (NYSE:BABA) stock is hard for investors to get a handle on. On the one hand, Alibaba group has access to the largest consumer base in the world.  On the other, Alibaba group operates in a company that is trying to transition its emerging economy to rely more heavily on an aging consumer base and a workforce that is shrinking. Both factors are causing concern about consumer consumption.

Retail growth in China slowed in August to 7.5%, down from 7.6% in July. But the larger story was that the July number was down significantly from the 9.8% recorded in June. Instead, it was much closer to the 7.2% number recorded in April.

But investors are largely shrugging that decline off. BABA stock is up nearly 35% for the year. But the growth is less impressive when measured on a year-over-year basis. Alibaba stock benefits from being sponsored by high-quality U.S. mutual funds, including the Fidelity OTC Portfolio (MUTF:FOCPX) and the Miller Opportunity Trust (MUTF:LGOAX).

Alibaba Is Still a Growing Company

Despite the recent departure of founder and longtime CEO, Jack Ma, Alibaba is in good hands and poised for continued growth. Recently, Alibaba announced a partnership with Douyin, the Chinese version of the social media app TikTok. As Wayne Duggan of InvestorPlace reported, Douyin has approximately 320 million daily active users as of July. To put that number in perspective, the entire population of the United States is roughly 327 million.

Douyin is making plans to monetize its platform by integrating external shopping links. These links would connect consumers directly to products listed on two of Alibaba’s e-commerce platforms, Taobao and Tmall.

“[Douyin] can be strong weapon for e-commerce, especially for Alibaba Group and Tencent (OTCMKTS:TCEHY), which want to reach to younger consumers and those living in smaller cities,” Lu Zhenwang, CEO of Wanqing Consultancy, told the South China Morning Post last year.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 170.87.

The projected upper bound is: 181.57.

The projected lower bound is: 161.45.

The projected closing price is: 171.51.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

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 27.8228. This is not an overbought or oversold reading. The last signal was a sell 10 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 45.12. 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 34 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 -155.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 sell 0 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -5.430 at 171.550. Volume was 30% below average (neutral) and Bollinger Bands were 38% narrower than normal.

Open     High      Low     Close     Volume___
179.250 179.250 171.300 171.550 2,544,876
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 178.11 172.04 168.64
Volatility: 30 38 38
Volume: 2,883,923 2,964,945 3,393,942

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 1.7% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 23 periods.

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