- BABA has been in consolidation mode in the $160s for more than one week.
- Alibaba stock is trending in an ascending wedge formation.
- In order to blast off to $185, BABA shares must stay above the pivot at $161.88.
Alibaba (BABA), the Chinese e-commerce giant, started the week in consolidation mode and appears likely to end it there. BABA shares opened on Friday a little over 1% down near $163. Its lack of movement as of late makes it a candidate for an upcoming spike in price action.
Alibaba news: BABA earnings scheduled for November 18
Alibaba executives announced on Friday that unaudited results for the quarter ending on September 30 will be released before the market opens on November 18. Wall Street analyst consensus expects $1.95 earnings per share (EPS) on $32.03 billion. In the past three months, there have been three upward revisions and ten downward revisions on the upcoming quarter.
In unrelated news, Bauhinia Culture Holdings is rumoured to be in talks to buy Alibaba's South China Morning Post. The English-language Morning Post is one of the premier newspapers in Hong Kong, and the Chinese state-owned company is said to be interested in adding it to its other media properties.
Barclays on Wednesday added the digital powerhouse to its "overweight" category in a sign of growing Western institutional interest, which waned heavily in the past year after Beijing decided to crackdown on Alibaba and other tech heavyweights.
BABA key statistics
| Market Cap | $454 billion |
| Price/Earnings | 19.6 |
| Price/Sales | 3.78 |
| Price/Book | 2.93 |
| Enterprise Value | $402 billion |
| Gross Margin | 38% |
| Net Margin |
19% |
| 52-week high | $319.32 |
| 52-week low | $138.43 |
| Short Interest | 2.7% |
| Average Wall Street Rating and Price Target | Buy 242.11 |
Alibaba (BABA stock) technical analysis: Beware $161.88
BABA has been consolidating for the six prior sessions between $162.35 and $171.89. This region has acted as a demand zone long enough that it appears to be asserting a further swing lower is not in the cards. The major no-go is the pivot point at $161.88. If BABA price can remain elevated above here, then the stock will continue picking up momentum until it heads higher.
At the moment, it appears that BABA stock is trading within a newly formed ascending wedge formation. The topline only began in early September and the bottom line of the wedge was formed in early October. With the topline more horizontal compared with the bottom line, it would seem that BABA is nearer than most might think to a surge upward. BABA is currently trading directly on the bottom line.
If BABA collects enough spare demand at this level, it could rise to retest the October 20 high of $182.32. Since this sits just under the topline, at $183.77, it would be unsurprising if bulls decided to make a go at the R1 resistance pivot point at $185.33. Making it above here, would allow a much larger surge to test the R2 pivot at $205.77.
If, however, BABA price drops below the pivot point at $166.88, then the thesis is null.
BABA 1-day chart
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