Alibaba Group Holding Limited (NYSE:BABA) technicals can be viewed as solid

Alibaba Group Holding Limited (NYSE:BABA) technicals can be viewed as solid

Alibaba Group Holding Limited (NYSE:BABA) technicals can be viewed as solid

Alibaba Group (NYSE:BABA) is either a case of the glass being half empty or half full. Although worries obviously abound for Chinese equities, the technicals of Alibaba stock can be viewed as solid.

On Thursday, the U.S. markets all surged . The three major investment indices were all in the black. Further, several companies in industries ranging from technology to oil rose meaningfully.

But American stocks weren’t the only ones benefiting from the bullishness. Perhaps surprisingly, BABA stock climbed strongly, gaining nearly 3% on the day.

Based on that move, Alibaba stock may seem like a solid buy. Plus, Alibaba’s Group’s peers, such as JD.com (NASDAQ:JD) and Tencent (OTCMKTS:TCEHY), have also enjoyed strong momentum.

But although BABA stock is up big since hitting a bottom in early August, its Friday closing price of $17.69 should raise eyebrows.

For one thing, $180 represented resistance three times between the beginning of July and the end of August. That BABA stock couldn’t get past this level again is quite telling.

Additionally, the U.S.-China trade war is still worrisome. While the markets are enjoying their rally, a Twitter (NYSE: TWTR) post from President Trump could derail everything. Thus, I’m not too wild about jumping aboard BABA stock.

Technical Indicators

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 169.26.

The projected upper bound is: 187.98.

The projected lower bound is: 167.86.

The projected closing price is: 177.92.

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 21 white candles and 29 black candles for a net of 8 black candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

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 83.6565. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 58.84. 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 23 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 80. This is not a topping or bottoming area. 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 buy 5 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 1.090 at 177.780. Volume was 71% below average (consolidating) and Bollinger Bands were 11% narrower than normal.

Open     High      Low     Close     Volume___
177.810 177.940 175.870 177.780 1,108,397
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 172.76 170.54 167.42
Volatility: 26 38 38
Volume: 1,932,109 3,041,618 3,551,387

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 6.2% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 12 periods.

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