MARKET MIXED/ BULLISH ON ALIBABA AMID US-CHINA TRADE TALKS
Alibaba is scheduled to report its earnings before the market open on Thursday. The closing price of Alibaba on Tuesday was $177.67 – higher by about 1%, compared to the previous close.
Alibaba shares have slipped nearly 9% over the last three months as investors assess what impact trade tensions will have on the Chinese e-commerce powerhouse. Alibaba grabbed 4% of the cloud computing market share last quarter and its cloud business is expected to grow 95% in terms of revenue for the June quarter.
Alibaba announced in early August a partnership with Starbucks, that will see Alibaba utilize its recently acquired food-delivery startup Ele.me.
Analysts surveyed by FactSet expect that Alibaba will report EPS of $1.21 in the June-ended quarter, up from $1.17 for the same quarter in the previous year. The FactSet consensus calls for revenue of $11.9 billion for the June quarter, compared with $7.4 billion a year ago for the same quarter.
On the technical front, the RSI is currently at 44.52% and suggests that the market can move in the upward direction. The %K has crossed the %D from below to the upside at 11.80% and suggests that the market may head upwards. The current market price is below the middle band of the Bollinger bands and is heading upwards. The current price is above the MA5. Overall market sentiment seems to be mixed to positive.
TRADE SUGGESTION-LIMIT BUY AT 177.60 TAKE PROFIT AT 178.80 STOP LOSS AT 177.00