Alibaba stock price sees biggest drop

Amid the shopping frenzy of Black Friday and Cyber Monday, falling prices were not just found online but also hitting many e-commerce shares. 

Source: Bloomberg

Last night, the Chinese e-commerce giant Alibaba fell for a fourth-straight day, its longest losing streak since its 19 September Initial Public Offering (IPO), for an overall dip of 7%.

The company’s stock also posted its biggest one-day loss when its stock price plunged by as much as 5.3%, before settling for a 5% loss.

Disappointing figures from the Black Friday sales did no favours for Alibaba. According to the National Retail Federation, sales over the weekend were lower by 11.3%, compared to the previous year.

This weighed on technology and Internet stocks overall. Amazon, Yahoo, and Google were among other industry players under pressure on Tuesday.

Alibaba had jumped 2.88% that’s $113.92 ahead of Black Friday as investors banked on a similar boost to its stock price when the company posted record sales on 11 November, China’s Singles’ Day, a day similar to Cyber Monday earmarked for heavily discounted online shopping.

We’re starting to see profit-taking gaining traction, which has put the stock under its 20-DMA. This suggests further pressure in the interim and a potential test of the next support level around $100.

On a longer-term view, Alibaba’s fundamentals are still intact so investors can see any pullbacks as an opportunity for entry.

According to a Bloomberg poll of analysts, 33 are calling a ‘buy’, three have a ‘hold’ call, and two are recommending to sell. Their consensus target price over the next 12 months is $118.52, an upside of 11.8% from the current price of $105.99.

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