The Federal Reserve remained on hold for the sixth time, continuing to maintain interest rates at 5.25-5.50%, while also rejecting the possibility of further interest rate increases.
Nonetheless, with inflation data still higher than expected, a high interest rate environment is likely to remain in place for some time to come. Global stock markets have experienced a violent rebound, especially Hong Kong stocks, which have surged by about 20% from the bottom in January this year, finally ushering in a long-lost bull market. U.S. stocks, which had technically turned negative before, also rebounded dramatically to levels before falling.
Today, let's look I to the technical charts of a few famous Chinese stocks.
BABA
BABA daily chart
Double bullish sign for Baba stock! Firstly, the share price broke out from the ascending triangular pattern last Thursday. At the same day, Baba stood back above its EMA200 trendline, which is a great sign of trend reversal. Moreover 78.67 HKD acts as a very strong resistance for the past half years and now it turns into a strong support. I believe with all this indicators, $Alibaba(09988)$
PDD
PDD daily chart
PDD share price underwent correction for almost half years since the big gap up by end of November last year. As we can observe, the share price touched 2 times onto the EMA200 support and rebounded well. And this round, PDD formed a higher low pattern which represent a bullish pattern continuation in its share price. For such, I am $Pinduoduo Inc.(PDD)$
TSM
TSM daily chart
TSM! A very good tech stock to be in your watchlist oo holdings. The share price broke below EMA50 which represented a potential trend reversal for mid term but TSM managed to rebound strong after its earnings release and eventually avoided the death cross between EMA25 and EMA50. With the positive sentiment in semiconductor sector and given that the share price stands well above EMA10 now, I believe $Taiwan Semiconductor Manufacturing(TSM)$
JD
JD daily chart
How about JD, one of the PDD rivals. Similar to BABA trend, the stock stayed bearish and under the EMA200 trendline for years. And the good news is the recent rebound of Chinese stocks sends JD back to above EMA200 trendline. This is a confirmation sign for the trend reversal in JD share price. We should expect the formation of higher lows and bullish continuation pattern for $JD.com(JD)$
LI Auto
LI daily chart
Last but not least, let's end with the EV maker, LI Auto. For Li, we could see some strong rebound last week but the share price remains well below the EMA200. Also, the company is going to release its earnings next Wednesday. The result should not be awesome, but it is expected due to the slow momentum in EV market. Anyway, I am pessimistic for $LI AUTO-W(02015)$
Summary
As most of us are aware of, Chinese stocks have gained momentum as market players scurry to avoid missing rallies driven by supportive policies while cautioning that the upswing does not yet reflect a return of long-term investors.
A series of measures announced since mid-April to support the mainland and Hong Kong stock markets are playing a key role.
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Technical Analysis of Alibaba (BABA)
Business and Industry: Alibaba is a leading technology company in China, operating in various sectors such as e-commerce, cloud computing, digital media, and entertainment. The company has a strong presence in the Chinese market and is expanding globally. The e-commerce industry in China is expected to continue growing, driven by increasing consumer spending and the adoption of online shopping.
Earnings Analysis: Alibaba's latest earnings report for Q3 2024 showed an EPS of 5.73 CNY, with a net profit margin of 5.59%. The company's forecasted EPS for the full year 2024 is 62.47 CNY. Looking ahead, the earnings forecast for 2025 and 2026 indicates expected growth in EPS, gross income, and EBIT.
Capital Flow Analysis: The recent capital flow data for Alibaba shows mixed trends. Over the past five days, there has been a net outflow of capital, except for a significant inflow on April 29th. On a daily basis, there have been both inflows and outflows, indicating volatility in investor sentiment.
Trend Analysis: The current support price for Alibaba is 74.56 USD, while the resistance price is 81.36 USD. The stock price as of May 6th is 81.33 USD. The average cost is 74.74 USD. These levels can be used as reference points for analyzing the stock's price movement.
Valuation Analysis: Analysts have provided a target price range for Alibaba. The mean target estimate is 106.46 USD, with a low estimate of 80.0 USD and a high estimate of 146.0 USD. It's important to note that these target prices are based on analysts' opinions and may change over time.
Investment Advice:Based on the technical analysis of Alibaba, here are some key points to consider:
The stock has shown a bullish sign with a breakout from the ascending triangular pattern and standing above the EMA200 trendline. This indicates a potential trend reversal.
The support level at 78.67 HKD has turned into a strong support, which further strengthens the bullish case for Alibaba.
The earnings forecast suggests potential growth in the company's financial performance in the coming years.
The recent capital flow data indicates mixed investor sentiment, reflecting volatility in the market.
Analysts have provided a target price range for Alibaba, indicating potential upside.
However, it's important to note that investing in stocks carries inherent risks, and stock prices can fluctuate. The information provided here should not be considered as investment advice. Investors should conduct their own research and analysis, consider their risk tolerance, and consult with a financial advisor before making any investment decisions.
Disclaimer: The above analysis and recommendations are for informational purposes only and should not be considered as investment advice. Investing in stocks involves risks, and it's important to carefully consider your investment objectives and risk tolerance before making any investment decisions.