Alibaba Group Holding Limited (NYSE:BABA) Strong active user growth and Alipay have made Alibaba a force that not many can reckon with in China

Alibaba Group Holding Limited (NYSE:BABA) Strong active user growth and Alipay have made Alibaba a force that not many can reckon with in China

Alibaba Group Holding Limited (NYSE:BABA) Strong active user growth and Alipay have made Alibaba a force that not many can reckon with in China

Alibaba (NYSE:BABA) has long been the top retailer in China, which boasts a population of 1.4 billion. But sometimes it’s still difficult to understand just how big the company has become in the nearly 20 years it’s been around. 

  1. 636 million annual active consumers
    Alibaba’s annual active consumers on its China retail marketplaces hit a record high of 636 million this past quarter, up 23% in the past year. The company added 35 million users just in the previous quarter.

You’d be hard-pressed to find a company that would make a good comparison with Alibaba in terms of users. That’s because the company is so large that it acts as an online retailer, like Amazon.com, as a video streaming platform, like Netflix, and as a social network, like Facebook — and that’s just three of its many business arms.

However, it’s still interesting to compare Alibaba to better-known companies, even if they aren’t the same type of business or using apples-to-apples numbers. For example, Netflix has 140 million global subscribers, while Instagram Stories has 500 million daily users, and Facebook is up to an incredible 2.7 billion members.

Alibaba said 70% of the increase in its annual active consumers came from third-and-lower-tier cities in China. So, while Alibaba started in China’s major cities, much of its growth is coming from less populated areas. To help with that, the company has been testing out a new feature that shows a simpler version of its platform to first-time or less frequent users so they aren’t overwhelmed. As they become more comfortable with the platform and want more of what Alibaba has to offer, a more advanced version of the platform is shown to top users. Data the company is gathering shows this strategy is paying off.

  1. 1 billion Alipay users
    Alibaba’s digital wallet, Alipay, hit a milestone in mid-January, when it hit 1 billion annual active users. Just as Alibaba’s retail marketplaces started in China’s big cities and have spread, AliPay started in China but has been spreading around the globe. The service has members from more than 110 countries and regions worldwide.

The mobile market in China is dominated by both AliPay and WeChat Pay, from competitor Tencent. Together, the two platforms claim more than 90% of the market, according to consultancy firm Analysys.

Having the AliPay app played a significant role in helping Alibaba grow its active consumers. It did this by implementing a user acquisition program that uses referrals through the AliPay app to lead people to its online shopping platforms.

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 156.14.

The projected upper bound is: 176.30.

The projected lower bound is: 156.10.

The projected closing price is: 166.20.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with ALIBABA GRP ADR). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

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 53.7612. This is not an overbought or oversold reading. The last signal was a sell 6 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 58.24. 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 6 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 -19. This is not a topping or bottoming area. The last signal was a sell 6 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 3 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -2.230 at 166.150. Volume was 37% below average (neutral) and Bollinger Bands were 8% narrower than normal.

Open High Low Close Volume___
168.710 168.710 165.410 166.150 2,744,784

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

Moving Averages: 10-period 50-period 200-period
Close: 168.45 152.77 169.22
Volatility: 27 43 43
Volume: 2,107,951 3,594,121 4,272,112

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 1.8% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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