Alibaba Group Holding Limited : Benefit from the recovery
By Anas Boumedian
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
US$105.98 | US$0 | US$99.4 | -100% |
The e-commerce website recently introduced on the stock exchange shows a strong profitability with a net margin of 37% in 2015. The relatively high valuation levels show the optimism and abundance of investors. In addition, analysts covering the value mainly keep a 'buyer' bias, and are aiming an appreciation of 14% on average.
Graphically, the stock has decline upon contact with the USD 119.1 resistance. A technical rebound seems under construction near to the USD 103.9 support. The 50-day moving average serves as a support to prices and halts bearish movements.
Thus, the timing seems opportune to buy Alibaba shares and take advantage of a probable recovery. The target price will be set at USD 115.1 and 119.1 by extension. Nevertheless, the strategy will require a stop-loss below the USD 99.7 support.