Alibaba is struggling on the stock market, against the backdrop of Beijing’s regulatory offensive against the high-tech giants of the Middle Kingdom. The action of the Chinese e-commerce giant (code BABA, on Wall Street) has lost a lot of ground, since the major peak registered a little over a year ago. Currently, the group is only paying itself 18 to 24 times the expected profits for 2022, for an enterprise value (market capitalization and cumulative net financial debt) representing 2.2 times the expected turnover, according to the consensus of analysts.
However, the outlook is considered more uncertain than before. “The fall in Alibaba Group shares is, like that of other Chinese technology stocks, impressive, falling nearly 60% in the space of a year, from nearly $ 320 to just $ 130. The value is now in an important technical zone which could start to offer support: it is flirting with the low point of the end of 2018 which is slightly above the high point of 2014 at 120 dollars (old resistance which can become support) ” , underlines Alexandre Baradez, head of market research at IG France.
>> To read also – Alibaba and Jack Ma, its brilliant founder, under pressure in Beijing
If the action must start to slow down its decline and then to rebound, “this is the technically perfect zone… but it is always dangerous to want to catch a falling knife”, recalls the expert, who notes indeed “a strong acceleration bearish with the formation of a big gap (dimension hole) on the last movement ”.
According to him, it will therefore be necessary at least to fill this gap and a return above the two obliques that cap all rebound attempts in recent months (see graph, Editor’s note) to be able to speak of a stabilization and a beginning of a rebound of the title. “Worded differently: a return above $ 160 is necessary to begin to consider a new bullish impulse,” warns Alexandre Baradez.
>> To read also – Alibaba and Tencent soon ejected from the Stock Exchange of the United States?
Discover numerous analyzes (technical, financial and economic) in Momentum, Capital’s premium newsletter on the Stock Exchange. Scenarios (on stocks, indices, gold, cryptocurrencies, currencies…), the essentials of the news to remember… Every day, at 12:30 pm, in your e-mail box for only 6.90 euros per month. And right now, with the promo code CAPITAL30J, enjoy a month of free trial. To subscribe, just click on the link below.
