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A Word and A Chart About and On Alibaba

Alibaba.com is one of the world’s largest wholesale marketplaces.

To be honest, I had never gone to their website until today, even though we bought shares in BABA 2 weeks ago. So, in case you are like me and have not checked them out, they sell a lot of consumer items in bulk. 

And they also sell pretty much everything. For instance, if you want a 1000w off-grid wind power Free Energy System for your home or business, you can get one and find an online description of the supplier, including their annual revenue. Plus, if you want them in bulk, you can order 1000 sets at a reduced price.

BABA has proven controversial a lot, most recently with a lawsuit settlement on monopolistic practices. However, the impact on their revenues is nominal and, in fact, could be a plus, as the company’s stock price trades at just 8x net profits.

Anyway, China overall, has had no shortage of bad press. Yet, before we learned Jack Ma and others bought up to $200 million of BABA stock, the stock looked and still looks appealing to us. If one is looking to be a contrarian to all the bad press, then BABA is a company with solid fundamentals.

Hence, the charts are in focus.

There are a few technical aspects we like to focus on that stand out in the Daily chart.

The new 60+ day low followed by a gap higher leaving a potential long term bottom.
That gap up also reversed the price below the January 6-month calendar range.
Although it continues to underperform the benchmark, it is nearly on par.
Real Motion has a bullish divergence, in that momentum is above the 50-DMA while price trades just below its 50-DMA.
Relative to the China ETFs KWEB and FXI, BABA is doing better.

Now looking ahead:

The 6-month calendar range is support and should hold, while the recent lows is the optimal risk point.
The 50-DMA needs to clear and confirm as a phase change to recuperation.
The January 6-month calendar range high, at 76.69, is another key area to clear.

On these types of trades, risk is extremely important. Finding bottoms is a tricky trade, but when done right, can have huge payouts.

Finally, BABA reports earnings pre-US market opening on February 7th.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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“I grew my money tree and so can you!” – Mish Schneider

Follow Mish on X @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

In this video from CMC Markets, Mish looks at a selection of popular instruments, outlining their possible directions of travel.

Mish is a favorite guest in Singapore, where she gets to discuss the macro and how to think about investing in the big picture. In this short clip from Breakfast Bites, Mish talks TSLA.

In this video from Stockpick, Jillian Glickman and Mish discuss economic outlook and current investment picks plus forecasts on inflation

Mish and Dale Pinkert discuss the equities and futures markets and how she and MarketGauge are positioned right now in this FXTrader interview.

In this video from CMC Markets, Mish looks at a selection of popular instruments ahead of today’s US Q4 GDP announcement, outlining their possible directions of travel.

Mish makes up a new ETF (not real) called VAIN, but really discusses the basket of stocks that are worth watching in this appearance on Yahoo! Finance.

Mish discusses Alibaba and how the rumors of China’s impending demise might be a bit exaggerated on Business First AM.

Mish talks all about retail and stock pick Abbvie (ABBV) on Business First AM.

Nicole Petallides and Mish dig deep into trends and stocks to watch for next big moves, as we are in full January trend mode on this video from Schwab Network.

On the Monday, January 22 episode of Your Daily Fivefrom StockCharts TV, Mish sees the potential for consumers to spend more money, from self-help to dieting, to makeup to skincare to fashion — pointing out several relevant stocks and how to trade them.

Mish looks at a selection of popular instruments in this video from CMC Markets, outlining their possible directions of travel.

Mish joins Jason Perz on the Against All Odds playlist, where she covers it all talking the mental game of trading, commodities, futures, equities, technical analysis, and macro.

Mish’s Market Minute on StockCharts TV returns, all new! Mish and Geoff Bysshe share how the powerful “Calendar Range” StockChartsACP plugin tells you who and what to believe, when to act, and what to trade. The new year is a big “reset” emotionally, and January sets the tone for the next six months AND the year. Every month is “like an inning in baseball,” financial reports focus on quarters, but analysts think in terms of the first half and second half of the year. How can you harness this knowledge to your benefit? Watch to find out!

Coming Up:

January 30: Breakfast Bites, Singapore Radio & Live in the Market Coaching CMC Markets & CNA Asia First

February 2: Benzinga Pre-Market Show

February 5: Money Show Life with Chuck Jaffe

February 21-23: The Money Show in Las Vegas

February 29: Yahoo! Finance & Your Daily Five, StockCharts TV

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY): 480 now the pivotal zone.
Russell 2000 (IWM): 195 pivotal, 190 support to hold.
Dow (DIA): 375 support.
Nasdaq (QQQ): 415 support.
Regional Banks (KRE): 50 key to hold.
Semiconductors (SMH): 184 support.
Transportation (IYT): 262 now pivotal.
Biotechnology (IBB): 135 pivotal.
Retail (XRT): Flirting with 70, which has to clear and hold to stay very bullish.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

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