Unstoppable Alibaba Group Holding Limited (NYSE:BABA)

Unstoppable Alibaba Group Holding Limited (NYSE:BABA)

Unstoppable Alibaba Group Holding Limited (NYSE:BABA)

The trade war is officially on with new Trump tariffs on $34 billion worth of Chinese imports going into effect last week. China has retaliated in a like manner, imposing tariffs on $34 billion worth of American goods. Both are at 25%. That’s a lot of extra cost that consumers will have to bear.

The only thing worse is if everything threatened is actually charged, because of the implications for trade that are honestly hard to guess at right now.

Sino-U.S. relations remain as sour as ever in the meantime, as struggling Chinese telecom ZTE continues to be denied U.S. parts because it dared to engage in trade with North Korea and Iran, the two countries the U.S. wishes to pressure. This despite the fact that it recently changed its leadership to comply with U.S. conditions to lift the ban. ZTE is also required to pay a $1 billion fine, place $400 million in escrow and allow outside monitoring if it wants the Commerce Department to allow some companies to do business with it.

Alibaba, one of the leading deal makers of China has been busy. Read on to know more:

Focus on Non-U.S. Markets

With the Trump administration going anti-China, Alibaba was involved in just one major U.S. investment this year: leading a $26.4 million funding round in a data-analysis startup called SQream Technologies. This is a far cry from the significant investments in social media company Snap, ride-sharing company Lyft, VR startup Magic Leap and online sports merchandise retailer Fanatics in the recent past.

Alibaba is instead continuing investments in other emerging areas, notably Asia and the Middle east-North Africa (MENA) region.

This month, the company announced the EMEA Ecosystem Partner Program to strengthen collaboration between its cloud customers and partners in the region. Its bigger partners include Intel, Accenture, Hashicorp, Ecritel, Altran and Micropole. The program is also available to startups via Station F, one of the largest startup campuses that has incorporated the program into its exclusive perks for startups.

The focus on international markets also got it interested in popular Turkish online fashion retailer Trendyol. The two companies will work together to help Trendyol expand in Turkey and its neighboring countries. The timing and amount of investment is unknown. This follows a $600 million plan to set up a smart city concept near Dubai’s free port Jebel Ali to house 3,000 firms developing robotics, artificial intelligence and new mobile apps.

Adopts Blockchain Technology

Alibaba founder and CEO Jack Ma has talked down bitcoin technology while embracing the blockchain authentication system that backs it. The company has a big remittance business through its Ant Financial affiliate and has expressed its intention to use some of the $14 billion raised in its IPO to build the technology and solutions based on it.

Blockchain is expected to bring down the cost of transferring money while speeding up transactions and making them more secure, which is probably why Ant Financial is already deploying it in a solution targeting Hong Kong’s large Pilipino working population that regularly sends money back home (that remittance was $33 billion in 2017 and 10.2% of the Philipplines’ GDP in 2016, according to the World Bank).

Hong Kong is a great place to start with a number of companies already adopting the technology successfully. Singapore-based startup Toast for example, says it can transfer money in about 2 minutes. Another startup called EMO says it can transfer money in about 10. China’s Tencent has also introduced a service targeting the same remittances market through its Wechat platform.

Alibaba recently strengthened its position in Ant by acquiring a 33% stake in exchange of the then existing profit sharing arrangement (the company made a loss in the last reported period).

Alicloud Surpasses IBM

According to Synergy Research Group, Alibaba’s Aliyun moved ahead of IBM in the first quarter of 2018 to become the fourth largest provider of cloud services in the world. The company’s growth was initially driven by its strong position in the domestic market, but it has built on this position to become the second largest provider in the Asia Pacific region.

Today, it is expanding the world over with some of its more illustrious customers being InterContinental Hotels Group, KPMG, Nestle, Philips, SAP, Schneider Electric and Conversant. The company generated revenue of over $2 billion in its last fiscal year. It trails Amazon, Microsoft and Alphabet, all of which are growing just about as fast.

AI-Powered Fashion Retail

With its artificial intelligence-powered fashion retail solution, Alibaba has attempted to do the seemingly impossible: match the fashion trends to your own preferences to suggest trendy items that may satisfy you.

The system’s personalized recommendations come from its ability to read and analyze data generated by Alibaba’s ecosystem, images of more than 500,000 outfits from Taobao stylists and fashion expertise from Tmall partner brands. For the more fashion-conscious, it also offers cross-brand recommendations.

A concept store embodying the technology will open on the Hong Kong Polytechnic University campus from July 4-7.

Investment in China Media Group

As the government gradually loosens its grip over firms by adopting a mixed-ownership policy change, Chinese technology giants Alibaba and Tencent are making the most of the situation. So after snapping up stakes in leading Chinese telecom company China Unicom, the two have now turned attention to media company CMC.

With a stake in the owner of English Premier League team Manchester City and a joint venture with Hollywood studio Warner Brothers Entertainment, China’s CMC is a media company with a media giant in its own right.

The A-round fundraising brought in 10 billion yuan ($1.49 billion) for the company.

Cozying Up with French Conglomerate

The French conglomerate Bollore Group has signed a global partnership agreement with Alibaba covering cloud computing services, clean energy, logistics and other areas including new digital technologies and innovation. Bollore controls a large logistics operation in French colonies in Africa, which could be one of the reasons it is interested in a relationship. Besides, it also controls a 20% stake in French media giant Vivendi.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 202.85.

The projected lower bound is: 183.41.

The projected closing price is: 193.13.

Candlesticks

A black body occurred (because prices closed lower 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 26 white candles and 24 black candles for a net of 2 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 87.1359. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 46.92. 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 21 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 1. This is not a topping or bottoming area. The last signal was a buy 3 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 17 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 0.480 at 192.750. Volume was 26% below average (neutral) and Bollinger Bands were 49% wider than normal.

Open High Low Close Volume___
194.640 194.690 190.870 192.750 2,788,860

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

Moving Averages: 10-period 50-period 200-period
Close: 188.46 196.35 185.61
Volatility: 45 32 38
Volume: 3,850,855 3,975,735 3,924,304

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 3.8% 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 10 periods.

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