BABA Stock: Alibaba Group Holding Limited – Intraday Trade Secrets


Wall Street indexes surged on Monday after the U.S. Senate passed its version of a tax code overhaul, bringing the Republicans closer to implementing corporate tax cuts.

Some of the biggest gainers included bank and industrial stocks. Bank of America and JPMorgan rose more than 3 percent, while Caterpillar and Boeing gained about 2 percent.

“This is a positive reaction to the Senate’s passage,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The Senate on Saturday approved their version of tax bill in a narrow 51-49 vote. The Senate and the House of Representatives will have to settle differences in their respective versions before it becomes a law.

“That (reconciliation) can be a bit of a challenge because there are differences and the number of approvals to pass it is a little bit higher than it was for the individual two sides of the Congress,” said Frederick.

The S&P 500 has risen about 18 percent this year on strong corporate earnings and solid economic growth and also on hopes that Trump’s agenda of corporate tax cuts and looser regulations could come through. (Source: Reuters)

At 9:35 a.m. ET (1435 GMT), the Dow Jones Industrial Average was up 203.98 points, or 0.84 percent, at 24,435.57, the S&P 500 was up 18.35 points, or 0.70 percent, at 2,660.57 and the Nasdaq Composite was up 41.45 points, or 0.61 percent, at 6,889.04.

Top Pick for Tuesday: Alibaba Group Holding Limited (NYSE: BABA)

Alibaba Group Holding Limited (NYSE: BABA) has grabbed attention from the analysts when it experienced a change of -2.88% in the last trading session to close at $169.58. A total of 35,726,373 shares exchanged hands during the intra-day trade contrast with its average trading volume of 18.06M shares, while its relative volume stands at 1.98. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, Alibaba Group Holding Limited (NYSE: BABA) stock is found to be 3.83% volatile for the week, while 2.30% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $441.26B and the number of outstanding shares has been calculated 2.60B. Based on a recent bid, its distance from 20 days simple moving average is -8.38%, and its distance from 50 days simple moving average is -5.99% while it has a distance of 16.44% from the 200 days simple moving average. The company’s distance from 52-week high price is -11.56% and the current price is 97.16% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 31.56 together with Average True Range (ATR 14) of 5.03.

Stock’s Valuation:

Past 5 years growth of BABA observed at 58.90%, and for the next five years the analysts that follow this company is expecting its growth at 4.94%. The stock’s price to sales ratio for trailing twelve months is 14.79 and price to book ratio for the most recent quarter is 8.88, whereas price to cash per share for the most recent quarter are 17.67. Its quick ratio for the most recent quarter is 1.70. Analysts mean recommendation for the stock is 1.70. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.


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