Resilience to Coronavirus Concern Is a Bullish Sign for Alibaba Group Holding Limited (NYSE:BABA) Stock

Resilience to Coronavirus Concern Is a Bullish Sign for Alibaba Group Holding Limited (NYSE:BABA) Stock

Resilience to Coronavirus Concern Is a Bullish Sign for Alibaba Group Holding Limited (NYSE:BABA) Stock

Shares of Chinese e-commerce and cloud juggernaut Alibaba (NYSE:BABA) have fared quite well when you consider that the coronavirus from China has brought daily life at the epicenter to a screeching halt for about a month now.

Year to date, Alibaba stock is basically flat. It’s still up more than 10% over the past three months. Shares have repeatedly held the critical $200 level in 2020.

That’s pretty impressive.

Given the circumstances that Alibaba is operating against — the coronavirus outbreak, civilian distrust of the government, a slowing economy, etc. — one would reasonably expect the stock to be down big YTD, down big over the past few months and plunging below key technical levels.

But, that isn’t the case. Instead, Alibaba stock has been surprisingly resilient in the face of recent headwinds.

This resilience is a bullish sign for the stock. It means that, once current headwinds pass (and they will, soon), shares will resume their steady march higher.

The Bottom Line on Alibaba Stock

Alibaba stock is a long-term winner showing impressive resilience in the face of near-term headwinds. That tells me that once coronavirus fears pass (and they likely will within a few months), this stock is positioned to rip higher in a big way.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 216.42.

The projected lower bound is: 193.65.

The projected closing price is: 205.03.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white 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 22.0265. This is not an overbought or oversold reading. The last signal was a buy 1 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 39.22. 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 29 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 -125.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 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 sell 4 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -3.710 at 205.030. Volume was 72% above average (neutral) and Bollinger Bands were 9% wider than normal.

Open     High      Low     Close     Volume___
205.000 209.950 201.860 205.030 6,368,192
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 213.88 216.23 184.08
Volatility: 28 34 36
Volume: 3,737,620 3,389,683 3,575,032

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 11.4% above 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 22 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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