Alibaba (BABA) Stock Price and News: BABA posts strong results and recovery from Chinese sell off

• Alibaba releases Q1 results on Tuesday before the market opens.
• BABA stock trades sideways as investors mull over the results.
• BABA beats on EPS but misses revenue and increases buyback.

Alibaba stock is still trying to recover from a tough few weeks, well a tough few months really since its November 2020 high of nearly $320. It has all been one way for the stock in 2021. Alibaba was the original lead indicator for the Chinese stock debacle as it suffered just as it was due to spin off its ANT Group subsidiary. Jack Ma of Alibaba had appeared to criticize the Chinese leadership and the ANT group IPO was swiftly pulled and Jack Ma disappeared out of the public spotlight. All this resulted in sharp falls for BABA stock which traded to the low $200’s. Early 2021 saw some investors return to the stock with the BABA share price rallying back to above $270 but the uncertainty surrounding Chinese names continued to be a headwind. This was further added to recently with the DIDI stock drop and then further culls hit Chinese stocks after more regulatory crackdowns on stock such as Tencent Music (TME), Tencent Holdings(TCEHY), and others. BABA cracked hard, only finding support at $180. Thankfully for our regular readers, FXStreet made that call while all were jumping for the exit, saying “The chart looks bleak, but on the weekly we can see one potential staging area for some longs. The area around $180 is a nice volume staging point with plenty of volume to support the price. The point of control is at $180.93, this is the price with the highest level of volume since 2017.” We made this call on July 26 and now BABA stock has made significant headway to trade at just over $200.

This morning Tuesday brings Q1 results from BABA and they are slightly mixed. Earnings Per Share (EPS) beat but revenue missed analyst expectations. However, BABA has increased its share buyback program by a whopping 50% to $15 billion from a previous $10 billion. Still, the stock is unloved and trades 1% lower in Tuesday’s premarket.

Alibaba (BABA) key statistics

Alibaba stock forecast

Despite the results beating on EPS, BABA remains in a classic bearish downtrend with a series of lower lows and lower highs, the Moving Average Convergence Divergence (MACD) is crossed into sell territory. To end this, Alibaba stock would need to break $216 as this would make a higher high. If this is not taken out, the downside support/target is at $170 in the short term. The bounce zone we had identified at $180 would again be a support on the way to $170.

So is this a dead cat bounce? The next resistance is at $208 and then $216 as mentioned. This zone contains a lot of volume though so it will be hard to breakthrough. Breaking $216 sees volume thin out so the move shoud accelerate to $230 where volume again picks up and the high from late June is at $230.89.

But the trend is still pointing lower as are the major indicators.