$BABA - Alibaba
Is a lifeline coming for Alibaba? An interesting development in the Alibaba stock story!
Alibaba stock recorded significant developments yesterday! As of yesterday (10.9), it was added to the "Stock Connect" program, which connects the Hong Kong stock exchanges to the Shanghai and Shenzhen stock exchanges.
What is Stock Connect and what is the significance of this move?
The Stock Connect program allows members of Chinese stock exchanges direct access to stocks traded in Hong Kong, and vice versa. Alibaba's entry into this program opens the possibility for 200 million investors in China to invest in Alibaba stock, making Alibaba stock more accessible to a market of 200 million potential investors!
Is a lifeline coming?
Yesterday, after its addition to the Stock Connect program, Alibaba stock rose by 4.2% on the Hong Kong stock exchange. Some analysts predict this is just the beginning and give the stock a short-term price target of $105.
What does this mean for investors?
Alibaba has experienced some difficulties in recent years, but the above step could lead to a positive turning point for the stock. With the opening of the door to new investments from China, the stock is at a new crossroads. This move is expected to lead to a new flow of funds and make Alibaba more accessible to a new market of 200 million potential investors!
What do we see on the chart?
1. Converging channel: The chart shows a converging channel, where the upper line (red) acts as a descending resistance line and the lower line (green) acts as an ascending support line. This indicates a pattern of price convergence.
2. Breakout? According to technical analysis, prices are converging towards a breakout. This pattern usually signals a potential breakout, either upwards or downwards, and the direction depends on the break of one of the support or resistance lines.
3. Price to earnings ratio: Below the chart, we see the current P/E, which stands at 9.8, indicating that the stock may be undervalued.
4. Momentum: At the bottom of the chart, the P/E ratio over time shows a gradual increase, indicating that the market is starting to price in increased demand for the stock.
Are we about to see Alibaba break through the glass ceiling?
★ Under monitoring!