Current trend

The stocks of one of the world's largest companies in the field of Internet commerce Alibaba Group Holdings Ltd. are correcting at 89.00.

The issuer announced its plans to separate the business, which were first publicly announced in March this year. So, in addition to the separation of Alibaba Cloud Intelligence into a separate company, it became known that the DingTalk messaging platform was formed from this structure, after which it would remain fully controlled by the parent company, and information about a possible initial public offering (IPO) on one of the Chinese exchanges had already begun to arrive. At least, the placement of the Alibaba Cloud Intelligence division on the stock exchange has already been announced earlier, and even an approximate date has been set – May 2024. 

The financial report for Q1 was published, which analysts recognized as successful and began to actively raise their estimates of the prospects of the issuer's shares. Thus, DZ Bank AG updated its purchase recommendations, indicating a target price of 120.0 dollars.

As for the report itself, revenue amounted to 234.16B yuan, which is much better than the projected 224.39B yuan, and earnings per share – to 17.37 yuan, which is also higher than the estimated 14.59 yuan.     

Support and resistance

On the daily chart, the formation of a local ascending channel with dynamic boundaries of 104.00–87.00 continues.

Technical indicators are in the state of a sell signal, which has weakened somewhat recently: the range of EMA fluctuations on the alligator indicator remains wide, and the AO histogram, being in the sales zone, still forms descending bars.

Support levels: 86.60, 78.00.

Resistance levels: 93.50, 102.00.

Trading tips

If the asset reverses and declines and the price consolidates below the support level at 86.60, short positions can be opened with a target at 78.00 and stop-loss at 90.00. Implementation time: 7 days and more.

If the asset continues growing globally and the price consolidates above the local resistance level of 93.50, long positions will be relevant with a target at 102.00. Stop-loss – 90.00.