Alibaba Group Holding Limited (NYSE:BABA) This dip is a buying opportunity

Alibaba Group Holding Limited (NYSE:BABA) This dip is a buying opportunity

Alibaba Group Holding Limited (NYSE:BABA) This dip is a buying opportunity

In mid-June, Alibaba (NYSE:BABA) was making new all-time highs above $210 as investors were focused on the company’s hyper-growth prospects through the booming Southeast Asian consumer markets.

But then escalating trade tensions stung the stock. Investors stopped focusing on big growth in under-penetrated Southeast Asia. Instead, they focused on what tariffs could mean for BABA stock.

As a result, BABA stock dropped. In a big way. Entering July, BABA stock was trading right around $185.

Alibaba has been a winner so far this year, despite there being a bear market. The stock was up ~20% at its peak year-to-date, and is currently up 11.51% so far this year (as of 7/6/18). During pullbacks like this, investors should always ask themselves: Is this for a reason, or is this an opportunity?

Overall, the bias in prices is: Sideways.

The projected upper bound is: 202.33.

The projected lower bound is: 183.14.

The projected closing price is: 192.74.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 24 white candles and 26 black candles for a net of 2 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 51.6021. This is not an overbought or oversold reading. The last signal was a sell 4 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 48.84. 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 sell 27 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 65. This is not a topping or bottoming area. The last signal was a buy 9 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 3 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 2.310 at 192.660. Volume was 24% below average (neutral) and Bollinger Bands were 2% narrower than normal.

Open High Low Close Volume___
188.500 192.950 187.930 192.660 2,865,679

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

Moving Averages: 10-period 50-period 200-period
Close: 189.98 197.46 186.16
Volatility: 27 31 38
Volume: 2,758,418 3,761,135 3,887,449

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 3.5% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of BABA.N (mildly bearish). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 16 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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