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Alibaba share price: Where next after smashing resistance?

Analysts envision an additional 6% upside for the BABA stock, currently trading at a new all time high of US$277.

Alibaba ADS baba hong kong share price stocks earnings q1 analysis prediction target ratings buy sell long short trade trading cfd analysts brokers Source: Bloomberg
  • What's the BABA share price update?
  • What is the stock outlook for Alibaba?
  • Four key price levels for investors to look out for

BABA share price: What’s the latest?

Chinese e-commerce and technology group Alibaba Group Holding’s (NYSE: BABA) saw its American depository shares cross a key resistance level to hit an all-time high price of US$276.97 during Monday 24 August 2020’s regular trading session.

Shares are up another 0.9% to US$279.50 in pre-market trading on Tuesday 25 August on the IG platform.

Last week, the group posted better-than-expected Q1 2021 results. Following that, Alibaba’s US-listed shares finished the week 5.7% higher.

What is the Alibaba stock outlook?

Q1 revenue at US$21.8 billion surpassed Bloomberg analyst estimates of US$21.4 billion, even if only slightly.

Adjusted non-GAAP earnings per ADS at 14.82 Chinese yuan (US$2.10) also exceeded projections of 13.8 Chinese yuan by 7.45%.

What is most impressive is the firm’s earnings per ADS on an industry standard accounting (GAAP) basis, which came in at 17.36 Chinese yuan (US$2.46), smashing Bloomberg predictions by 89%.

In light of these higher earnings, Bloomberg Intelligence analysts posit that Alibaba may deliver robust sales and profit growth in the coming quarters at a pace similar to pre-pandemic levels, given that its domestic commerce and cloud-computing businesses appear to have fully recovered.

CMB International analyst Sophie Huang maintained her earlier price target of US$299.5 and rating of ‘buy’ following the report.

She cited the ‘upbeat’ performance as well as BABA’s potential in ‘capturing online consumption recovery and long-term benefit from structural opportunities’ as key reasons for her bullish price outlook.

As of 21 August 2020, Alibaba’s American shares have received an average 12-month price target of US$294.03 alongside a ‘buy’ rating from 64 analysts polled by Bloomberg.

The price target represents an upside of 6.1% from the stock’s last closing price.

Feeling bullish on the BABA stock?

You can start taking a position on the e-commerce giant’s shares by opening a live or demo IG trading account today.

Technical analysis of BABA’s share price

From a technical perspective, IG market analyst Reo Liao had wrote last week that there are four key price levels for Alibaba investors to watch amid the company’s earnings.

They are:

  1. Enter price: US$ 261 (pivot)
    Bet if the actual result beats market forecast (open in long position)
  2. Target price: US$ 278.40 (if there is no obvious reversal signal at the 1st (R1) and 2nd (R2) resistance level)
    Bet if the actual result falls below market forecast (open in short position)
  3. Target price: US$242 (if there is no obvious reversal signal at the 1st (S1) and 2nd (S2) support level)
  4. Stop loss level: at the 1st resistance level (open in short position) and the 1st support level (open in long position)
Alibaba share price analysis prediction target resistance bull bear buy sell short long trade trading cfd stocks Technical chart of Alibaba's key share price zones

Meanwhile, Liao noted that risk factors appear rather independent from fundamentals of the economy for now, with the outlook showing correlation to market sentiments.

‘If the market view radically changes, Alibaba’s stock price may follow suit market sentiments to rise or fall,’ he added.

How to trade Alibaba with IG

Are you feeling bullish or bearish on the Alibaba stock? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Alibaba Group Holding Ltd (All Sessions)> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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