Dear subscribers, lets come together to discuss another quite interesting company... Alibaba! NYSE:BABA
The Alibaba Group is one of the largest Internet companies in the world, and has become enormously powerful in its home country in the recent years. Some analysts and well-known personalities went so far as to consider Alibaba systemically important for the chinese state.
Nevertheless, the share price has fallen by up to -65% in recent years and many investors have suffered heavy losses. Fears of a possible "delisting" of the company from the us financial exchanges were stirred up in the media. In addition, the founder Jack Ma disappeared for months after he publicly criticized the Chinese regulators in an interview.
In the recent months, we have seen money being withdrawn from Alibaba and other Chinese companies on a grand scale. At this point, we would now like to provide our subscribers with an analysis on Alibaba and answer important questions.
Both from an elliot-wave and from a fundamental perspective, we see a tremendous opportunity for investors in Alibaba. We consider a "de-listing" of Alibaba to be unlikely, and Alibaba's growth as well as their annual reports over the past few years give reason for optimism. Of course, Alibaba's growth will slow down in the coming years and record earnings like in the past won't be as common. Nevertheless, the company is very well positioned for the next years and will continue to expand to other countries.
Even if the Chinese government threatens to split up various segments of the company, we are sure that China will avoid "killing" one of its biggest companies and giving american companies a competitive advantage through this.
Also, the well-known investor Charlie Munger and long-time friend of Warren Buffet attracted a lot of attention with his vehement purchases of Alibaba shares. Charlie Munger purchased his first shares in Q1 2021, then purchased more shares in Q3 and finally added another portion in Q4. By now, his stake has reached a value of $71,500,000. (See dataroma.com/m/holdings.php?m=DJCO)
Technical explanation of the elliot-wave structure:
Based on our elliot-wave analysis method, we can assume that Alibaba has completed a very large cycle top (Wave (I)) and the stock's decline represents the cycle bottom (Wave (II)). Also worth noting is that the entire structure of Alibaba appears extremely clean. The entire rise of the stock was carried by two huge wave 1-2 setups, which formed back in 2015 and 2016.
Since the mentioned top, the stock started a correction in a large W-X-Y structure and we expect a final sell-off below the last low at $108.
For long-term purchases, first stakes can already be purchased now and if Alibaba should reach 108$ everyone should pay attention. We will publish another analysis on Alibaba on tradingview and will announce our entry in the future.
Disclaimer: According to legal regulations, Mornau-Research is not a certified or legally recognized financial advisor and any transactions based on published content are at your own risk. Mornau-Research cannot be held liable for any losses whatsoever according to the legal regulations in it's country of residence.
If you have questions related to a specific stock or the Elliot Wave theory, feel free to contact us.
Kommentar
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Dear subscribers....
Alibaba couldn't form a bullish movement and we barely avoided the breach of the major resistance @108.70$ yesterday. However in regard of today's earnings and the major correction in the markets it's very likely that we will reach lower low's in the next days.
There's a little chance that alibaba could suprise investors with a very positive outlook for the next years but we think that this won't likely happen.
We estimate that a impulsive wave 3 already started and this movement could bring us to 90$-80$ in the worst case.
do you have the entire count on baba EW vs. let's say Amazon? The asian stocks were trending similar path until covid, then they flipped, my worry is that the moment china starts to recover, US will start to head in the same direction, imagine correcting to 2016 levels or lower...:(
Mendenmein-Capital
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@cyberluck, At the moment we don't plan on counting the moves in Amazon, but if we have enough capacity we will surely look into it! Your concerns are justified, but we do not consider such a scenario to occur in the upcoming months.
If we should see mounting troubles in the next weeks, we will warn our subscribers accordingly.
MoatsNFlows
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$80 today
zlking23
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agree
NikshA36
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Hellow, can you explain please what ratios did you use for wave Y. I'm a beginner and that's interesting example of corrections, couse usualy wave Y is 1.618 of wave W. Moreover volume support level is nearby 103$
When we look at the chart of Alibaba, we as elliot wave analysts face an extremely complex situation.
We anticipated a WXY formation, in which wave X was extended in an extremely short so-called "flat". The correction pattern is made up of an extremely steep first ZigZag (a-b-c), a wave X as a flat and a final steep ZigZag (a-b-c) within a trend channel.
Furthermore, we have chosen this correction pattern because Alibaba has never extended a larger countermovement within the parameters of a large wave B. Of course, it could be that Alibaba could still form such a wave B and invalidate our previous setup. However, this would result in a multiple year long correction because Alibaba would form a large B and final C wave.
It is also important to note that WXY corrections vary strongly and are massively influenced by present chart formations (triangle/trend channel/etc...).
Feel free to reach out to us again if you should have any further questions!
chinmayamahapatra
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It looks like Baba going to 70$ atl support level. This might happen after earnings when Baba might gap down again
Mendenmein-Capital
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@chinmayamahapatra, At the moment, we expect the price to drop to the $100 mark, then we can estimate further price movements.
We think that the likelyhood of alibaba reaching 70$ is currently very low. However, with the breach of 108$, an acceleration of the sell-off can be expected.
Robbi12
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wxy for decline, must bookmark this
naorz
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On the one hand you claim that Alibaba will not break a record again, on the other hand you are drawing a wave of Elliott breaking a record. Lol