Breakout for Alibaba

10/13/2017 5:00 am EST


Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Alibaba (BABA) provides online and mobile commerce through products that enable merchants, brands and other businesses to market their products in China and internationally, notes Leo Fasciocco, editor of Ticker Tape Digest.

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The company provides retail and wholesale marketplaces available through both personal computer and mobile interfaces.

Retail marketplaces include the China online shopping destination (Taobao Marketplace), the China brands and retail platform (Tmall) and the China group buying site that offers products by aggregating demand from consumers through limited time discounted sales (Juhuasuan).

The stock came public in 2014 at $88.70. It climbed to a peak of $120 in late 2014 and fell back to $57.20 in 2015. It then formed a bottom and has since been driving sharply high.


The stock has broken out from a five-week, cup-and-handle base; the move carries the stock to a new all-time high.The push to a new high is bullish. The breakout comes with a pick up in volume. That is also bullish.

The stock put down a cup-and handle base in late September and October. The breakout comes with a pick up in volume. That is bullish. BABA's momentum indicator is trending higher and is  bullish.

Profits for the fiscal third quarter ending in December should be up 27% to $1.65 a share from  the $1.30 the year before.

BABA is expected to show a 45% surge in net for the fiscal year ending in March of 2018. The Street looks for $4.95 a share, up from $3.41 the year before.

We see chances for an upside earnings surprise. BABA beat the Street estimates three out of the past four quarters. However, earnings should be watched closely.

Looking out to fiscal 2019 ending in March, the Street predicts a 32% gain in net to $6.55 a share from the anticipated $4.95 this fiscal year.

We are targeting BABA for a move to $220. A protective stop can be placed near $174. We rate BABA an above average intermediate-term play.

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