Alibaba Group Holding Limited (NYSE:BABA) stock is bolstered by another income stream

Alibaba Group Holding Limited (NYSE:BABA) stock is bolstered by another income stream

Alibaba Group Holding Limited (NYSE:BABA) stock is bolstered by another income stream

Any investor even casually acquainted with Alibaba Group Holdings (NYSE: BABA) knows about its massive ecommerce business and its burgeoning cloud computing business. However, according to Bank of America, BABA stock affiliate Ant Financial’s Alipay payment app is a much bigger deal than investors may realize.

BABA Stock Super App

Bank of America analyst Eddy Leung calls Alipay a “super app.” Here are some of the numbers driving that high praise.

Americans are familiar with digital payment leader PayPal (NASDAQ: PYPL). As of the end of Q4, PayPal had an estimated 267 million global active accounts. Leung estimates Alipay has more than 600 million mobile users.

In addition, Alipay has the largest mobile and PC market share in Chinese payments at roughly 50%. Even better, that market share has barely budged since late 2016. Alipay is dominating the market and keeping competitors like Tencent (OTC: TCEHY) and Baidu (NASDAQ: BIDU) at bay.

Alipay offers a variety of useful payment services within it’s app. It also is expanding its services outside of payments. For example, Alipay now offers transportation pass services for bikes and buses in some large cities. It also offers delivery services and dining reservation services. Alipay users have utility booking and payment services at their fingertips. Alipay has also implemented a user rewards credit system and even offers charitable donations services.

Increasing Engagement

Leung says Alipay’s large, stable market share allows it to focus on monetizing its users and increasing engagement rather than growing its user base. The latest mobile app usage data from China suggests those efforts are paying off.

Alipay is already the third most popular app in China in terms of monthly active users behind only WeChat and QQ. It’s still a distant fifth place in terms of engagement. However, engagement numbers are significantly higher than they were just a couple of years ago.

More than 80 percent of Alipay users now use the app for multiple services, according to Bank of America. More than 60 percent use at least three services, while more than 20 percent use five or more different services. Service use is up across the board compared to a year ago.

“We see Ant Financial (‘Ant’)’s Alipay app emerging into a large mobile platform, going beyond its leading position in an already very large vertical segment and increasingly serving the needs in everyday life of its users and offering bigger opportunities to cooperate with the other business units under Alibaba,” Leung says.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 194.90.

The projected lower bound is: 176.98.

The projected closing price is: 185.94.

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 29 white candles and 21 black candles for a net of 8 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 8 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 55.9705. This is not an overbought or oversold reading. The last signal was a buy 19 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 61.24. 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 22 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 151.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 4.280 at 185.350. Volume was 10% below average (neutral) and Bollinger Bands were 66% narrower than normal.

Open High Low Close Volume___
182.510 185.500 182.000 185.350 3,164,285

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

Moving Averages: 10-period 50-period 200-period
Close: 180.14 175.74 165.91
Volatility: 27 33 44
Volume: 2,666,159 2,867,044 4,034,071

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 11.7% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 11 periods.

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