STORY: Alibaba And The Forty Thieves - Steal, steal - MUST READ!Once upon a time, there lived two brothers named Kasim and Alibaba, who were sons of a merchant and had an equal amount of inheritance. While Cassim married a rich lady and became a wealthy merchant, Alibaba married a poor, humble woman and lived the life of a woodcutter.
One day, Alibaba goes deep into the forest for some good quality wood. There, he chances upon a cave owned by a gang of 40 thieves. He watches from behind a tree and learns that the cave is magically protected. He hears the leader of the thieves say a magical word to open and close the cave...
Alibaba said the magical words, and the door opened...
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Alibaba is now rich and huge, and he might one day be in the same league as Amazon and Google.
This is China's no 1 - Welcome to AliBaba!
Buy, Buy!
D4 <3
Alibaba
G 20 Summit May Help Alibaba's ReboundAlibaba Group Holding Ltd.’s ( BABA ) stock has fallen nearly 30% from its June highs as stock market’s broad-based sell-off continues. The shares of the China-based e-commerce giant have been weighed down by rising trade war tensions between the U.S. and China.
Now with the G20 Summit just days ahead and a meeting with President Trump and President Xi scheduled, the season can be changed “winter to spring ” for Alibaba.
The company’s earnings and revenue estimates have been slashed over the past six months as the Chinese renminbi (RMB) has fallen sharply versus the U.S. dollar. But if the trade tension eases, the renminbi may begin to strengthen resulting in analysts boosting their earnings estimates.
The company reported blow out second-quarter earnings results, but still, earnings estimates for fiscal 2019 have dropped by 20% to $5.18 per share. Meanwhile, fiscal 2020 estimates have fallen 21.5% to $6.72 per share. The good news, earnings growth is expected to be robust at nearly 30% in 2020. Even better, analysts are forecasting earnings growth of 31.5% in 2021. It means that the stock is likely too cheap given its current earnings multiple of 22.5 times 2020 estimates.
If one averages the earnings growth in 2020 and 2021 to 30%, the stock is trading with a PEG ratio of 0.75. Should the stock trade with a PEG of 1, the PE ratio would rise to 30, and the stock would be worth $201 based on fiscal 2020 consensus earnings estimates. That would be an increase of nearly 33% from the current stock price.
The stocks PE ratio for the next 12 months is also historically low when compared to the past three years. Since 2016, the stock has traded with a valuation between 21 and 36. This too suggests that Alibaba’s stock is cheap.
The technical overview:
The stock is printing a rising wedge pattern on the daily chart. This is a bearish continuation pattern. A bearish breakout of the wedge may carry the price towards 130 bottoms. This ” bottom retest” can be used as a buying opportunity. 160 $ is the key resistance. Another buying opportunity would be a weekly closing above 160.
A near term sell opportunity is the potential bearish breakdown the wedge – estimated at 141 $ targeting 130 $.
VIPS growth potentialVipshop market cap. 3B vs Alibaba market cap. 343B
Has potential to grow in comparison with Alibaba
Long term idea without predefined stop loss and target profit.
Disclaimer: not investment advice, not qualified licensed investment advisor, author may have positions in mentioned assets.
Is Bitcoin's correction all that uncommon?On this study we quickly examine if Bitcoin's 2018 correction is an unusual phenomenon in financial markets and how it is compared to other industry leaders.
For our example we use Alibaba a reformer in the Retail Industry and Netflix a reformer in Entertainment. We consider Bitcoin to be the reformer in the Financial sector. All assets have fairly recently joined the market scene but revolutionized it, as opposed to similar cases that weren't used like Amazon, Apple or Google that have been around and well established for far longer. Facebook (reformer in Interactive Media & Service) could be used also but its growth was less parabolic.
At a glance we see that all 3 assets enjoyed a parabolic growth since 2015:
- Bitcoin > 10000%, Alibaba > 260% and Neflix > 800%.
After their all time highs, a significant correction followed:
- Bitcoin > 70%, Alibaba > 380% and Neflix > 37%.
It is obvious that such corrections are not uncommon for market leaders/ reformers and on the contrary quite common to industry reformers that have enjoyed a sharp period of extreme growth. Such corrections are typically healthy for the asset's progression. Although of course Bitcoin's correction is almost twice as much and twice as long, we need to consider two facts: It grew prior to this equally disproportionately and also the Financial Sector's market capitalization is twice as big (>$7 trillion) than Amazon's Consumer Sector or even more so Netflix's Entertainment Sector.
So during a common market correction investors as usual need to identify the right time to position themselves for the next growth period.
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Alibaba: 2 Month TargetAlibaba for the next week or so may have some small negative correlations due to concerns over trade in China and the recent effects tariffs and political decisions had on Asian markets. That being said, it is coming in on a strong for positive correlations when looking at a 2 month time period. An expectancy of a $150 price tag should occur within January and it seems to have strong stock potential for a very long term hold.
Dat gapWell it looks like the runaway gap that formed back in July last year is finally going to be filled. With all the downward momentum, as indicated by the MACD and Stoch RSI, that gap is acting as sort of a magnet just pulling the price down. The CMF also indicates that there is a lot of sell pressure so lower lows for NYSE:BABA should be expected.
The tech industry as a whole is hurting right now and that can be seen across all markets so trade with caution.
Shorting Alibaba short term due to Price vs ADL divergenceThe Entry
I wanted to enter on the 24 Sep, but was apprehensive as price was not near the resistance line.
On the 25 Sep just around the open at 9.30am I realise that the price was near the resistance line and so I entered. I wonder if I should have waited till 11am where the market open rush would have normalised.
The Situation
I think price will go down because of the divergence in ADL & Price. Which means that price (11 Sep - 21 Sep) was moving up despite there being more sellers.
It also seems like a good point as it is testing a previous support that is the 0.7 Fib.
Issues
RSI is not overbought territory.
External factors
This upside divergence in my POV is probably short term as it was driven by last week's easing sentiment towards the trade wars.
Bullish on the Chinese tech sector, 5 must have stocksSeptember is often considered a tough month for stocks. However, many Chinese stocks have already had a rough year due to escalating trade tensions between the U.S. and China.
By and large, the fundamentals supporting Chinese tech stocks are strong given small penetration rates in a very large and rapidly growing internet market. For the most part, the technicals point to healthy upside going forward.
The following 5 Chinese tech assets are hovering around their Point of Control POC: price point with the highest trade volume and are showing signs of recovery using a number of indicators. We use the China 50 Index as a benchmark for these assets.
JD.com trading at a blatant valuation discount- LONGOne of the trends taking place in my portfolio is an increased weighting in China's technology sector.
Amid the trade-driven pessimism over China, clamp down on digital assets and increased control over online content China's economy is trading at a blatant valuation discount to the U.S.
Within the last few months the BAT stocks Baidu BIDU, Alibaba BABA and Tencent TCEHY have been among the biggest losers.
The recent arrest of JD CEO Richard Liu has caused JD stocks to tumble further relative to its e-commerce peers and is now almost 50% off its 52-week high. I view this as a risk-reward profile that is heavily tilted in favor of the bull.
All indicators explained on the graph.
Alibaba Long Term Supply and Demand AnalysisThis is exactly why you dont buy after a huge rally! Price is losing steam, WK Demand and Support is broke now, WK in a downtrend, MN uptrend will be broke after this month.
I will wait for price to retrace to the 3M demand area drawn here, or wait for new and strong bullish impulses to start showing up on the WK and MN charts.
Patience!