Alibaba Group Holdings Ltd (NASDAQ: BABA)
On Tuesday, Alibaba Group, the storied Chinese internet commerce giant, reported strong results for the quarter ended September 2015, lifting its stock 8.4% to a high of $82.79.
BABA Earnings and Outlook
The company enjoyed double and triple digit percentage increases year over year in all key operational areas. Revenue for the quarter increased 32% to $3.49 billion. Gross merchandise volume (GMV) increased 28% to $112 billion. Mobile GMV accounted for 62% of total GMV transacted on the China retail marketplace, while mobile revenue climbed 183% to $1.66 billion. Non-GAAP net income grew 36% to $1.46 billion. Non-GAAP free cash flow was $2.14 billion, and the company completed stock repurchases of $2.74 billion during the quarter. Business Wire
BABA CEO Comments
“This was a great quarter for Alibaba Group, with strong growth across the board and particular outperformance in mobile. We continued our efforts to drive healthy GMV growth, deliver an unparalleled consumer experience and help quality merchants do business on our platform,” said Daniel Zhang, Chief Executive Officer of Alibaba Group. “We are winning in mobile and remain focused on our top strategic priorities, including internationalization, expanding our ecosystem from cities to villages, and building a world-class cloud computing business.” Yahoo Finance
BABA Technical Analysis
On Tuesday, BABA stock opened up $5.76 at $82.11. While the gap up to the open was significant, it was $3.11 off the pre-market high of $85.22. The stock opened below VWAP, hit HOD of $82.79 in 3 minutes and quickly came back below pre-market support. BABA traded below VWAP all day and trended lower until early afternoon before putting in the low of the day at $78.25.
BABA spent the final two hours of trading trying to push north but there was unlimited supply at $79.50 and it closed the day at $79.44. BABA needs to get and stay above this level to trade on the long side. The $80 level has acted as support / resistance as far back as March and could be a trigger level for the bulls. BABA tends to be drawn to the whole dollar where sellers step in and push it back down. If it takes out $80, I will be watching $81, $82, and $83. Thru $83 on volume, buyers are in charge and this could sail to, or thru Tuesday’s pre-market high of $85.22.
If BABA opens weak and cannot hold $79, it has potential to close Tuesday’s gap. If the stock does trade down, it could find some support at $78.40. On continued weakness thru Tuesday’s low of $78.25, I will be watching for that gap fill at $77.42, then $76.35.
As always, I’ll be watching price and volume particularly at the aforementioned levels for possible reversal trades.
BABA Company Profile
Alibaba Group Holding Limited is a holding company. The Company is principally engaged in online and mobile commerce through products, services and technology. The Company provides retail and wholesale marketplaces available through both personal computer and mobile interfaces in the PRC and internationally. Retail marketplaces and services operated by the Company include the China online shopping destination (Taobao Marketplace); the China brands and retail platform (Tmall); the China group buying site that offers products by aggregating demand from consumers through limited time discounted sales (Juhuasuan), and the global consumer marketplace targeting consumers around the world (AliExpress). Wholesale marketplaces operated by the Company include the online China wholesale marketplace (1688.com) and the online business-to-business marketplace that focuses on global trade among businesses from around the world (Alibaba.com). Google Finance
