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Alibaba slides despite good earnings; bearish correction to continue

Shares of BABA fell and closed the day at around 98.50. 

NEW YORK (TheStreet) -- Shares of Alibaba (BABA) were lower in early afternoon trading on Wednesday, despite posting higher-than-expected earnings and revenue for the fiscal 2017 second quarter.

Before today's opening bell, the Chinese e-commerce giant reported adjusted earnings of 79 cents per share, topping analysts' estimates of 69 cents per share. Revenue rose by 55% year-over-year to $5.14 billion and beat expectations of $5.03 billion.

"It's a good quarter," Wedbush Securities Managing Director Gil Luria said on CNBC's "Squawk Box" on Wednesday morning. The revenue growth was particularly "impressive," he said.  (Full article at TheStreet)

BABA 4H Chart 11/3

(click to enlarge)

Price top:
- Even before the earnings report, the price action of BABA appeared to be top. Note that there was a pullback in October that found resistance below 106. This confirmed further bearish correction.
- This week, the bearish correction is extending. 
- The fact that the price top is occurring despite earnings shows us that this is a separate concern.
- I think there is further downside within the current bearish continuation mode.
- Let's anticipate a slide at least towards the 93-94 area, capping expectation at 90. 

As Profit Confidential explains:

However, BABA stock is under pressure due to an ongoing investigation by the U.S. Securities and Exchange Commission (SEC) over its accounting practices. China’s largest e-commerce player is also gearing up for its “Singles Day” sale on November 11, which is also under scrutiny by the regulators.  (Full article at Profit Confidential)