Stock Markets Analysis & Opinion

Alibaba Reports Earnings Soon With Both Fundamentals, Technicals in Its Favor

I have not been shy about telling our readers and social media/media followers that we liked and bought Alibaba (NYSE:BABA) in February 2024.

And we sat with it… And sat with it…

Today, it’s paying us some cushy profits.

Will it last?

BABA reports earnings before the opening bell tomorrow.

The company split the business into six business divisions to avoid regulatory scrutiny in China. It has also repurchased $12.5 billion worth of shares.

For fiscal 2024, Alibaba’s EPS is estimated to be $8.63 vs. year-ago $7.64 on a 7.1% Y/Y growth in revenues to $130.2 billion.

Analysts say that BABA stock has a conservative upside potential of 30% upside.

Furthermore, the dividends and buybacks alone will return 4% annually for the next three years.

However, the monthly chart has its own story to tell.

The monthly chart is one of my favorites to look at, especially when one draws in the 23- and 80-month moving averages.

BABA ran right to the 23-month MA ahead of the earnings report.

What could that mean?

If the price clears, then we will assume that the stock has more room to run with a now 2-year business cycle expansion.

If the stock does indeed gap higher, then we are looking for a move to around $100.

If the stock comes in lower, we will use a support level of $77-80 to gauge the company’s health.

If the stock opens and trades between Monday’s range of $82.60-$85, we will watch Monday’s lows to hold.

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If it takes a day or 2 to consolidate these gains, then we will still watch that key moving average.

Fundamentals shift according to price-and this chart is a great place to go for that.

ETF Summary

  • S&P 500 (SPY) 512 key support
  • Russell 2000 (IWM) 200 key support
  • Dow (DIA) 387 support and 400 resistance
  • Nasdaq (QQQ) 437 key support
  • Regional banks (KRE) Through 50.50 compelling
  • Semiconductors (SMH) 220 key support
  • Transportation (IYT) 64 support 67 resistance -still relatively weak
  • Biotechnology (IBB) If cannot clear 135 could see return to 130
  • Retail (XRT) 75 now key support-thank you Gamestop and AMC for helping an old lady party
  • iShares iBoxx Hi Yd Cor Bond ETF (HYG) Fair warning as this confirmed below the 50-DMA


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