Alibaba Group Holding Limited (NYSE:BABA) Strength in Core Commerce Business

Alibaba Group Holding Limited (NYSE:BABA) Strength in Core Commerce Business

Alibaba Group Holding Limited (NYSE:BABA) Strength in Core Commerce Business

Alibaba Group Holding Limited BABA is set to report first-quarter fiscal 2020 results on Aug 15. In the last reported quarter, the Chinese e-commerce giant delivered a positive earnings surprise of 21.90%.

The surprise history has been decent in Alibaba’s case. The company surpassed estimates in three of the trailing four quarters, with average positive surprise of 12.52%.

Strength in Core Commerce Business

During the fiscal first quarter, the company set up a new English-language portal on cross border e-commerce platform, Tmall Global. The deal, which will expand product options on Alibaba’s Tmall platform, will likely aid the company’s top-line growth in the to-be-reported quarter.

Also, during the quarter, it signed an agreement with the Yiwu government to establish an e-commerce trade hub. The deal, which will enhance cross border e-commerce activities, will expand its top-line growth in the quarter to be reported.

Given innovation in data technology, widespread application of big data and increasing validation for Taobao and Tmall portals, the top line is expected to further expand in the quarter to be reported.

Overhangs Remain

Concerns remain in the form of the company’s heavy spending in new areas of core online retail business, with investments in supermarkets, stores, new artificial intelligence, digital entertainment and cloud computing businesses.

Also, U.S.-China trade tensions and other political worries may continue to weigh on Alibaba’s domestic as well as international growth.

Moreover, increasing competition from companies like Amazon.com Inc. (AMZN) and Jd.com (JD), among others, as well as deceleration of growth in the e-commerce market — both domestically and internationally — might impact its results in the soon-to-be-reported quarter.

Technical Indicators

Overall, the bias in prices is: Downwards.

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

By the way, prices are vulnerable to a correction towards 166.44.

The projected upper bound is: 168.41.

The projected lower bound is: 150.61.

The projected closing price is: 159.51.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 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 73.5965. This is not an overbought or oversold reading. The last signal was a buy 3 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 39.10. 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 4 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 -72. This is not a topping or bottoming area. The last signal was a buy 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 0.190 at 159.310. Volume was 62% below average (consolidating) and Bollinger Bands were 45% wider than normal.

Open     High      Low     Close     Volume___
157.250 159.310 155.540 159.310 1,433,657
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 162.48 166.55 164.99
Volatility: 45 35 41
Volume: 3,433,140 3,728,241 3,768,102

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 3.4% below its 200-period moving average and is in an downward trend. Volatility is high 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 7 periods.

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