A new 52-week low for Alibaba Group Holding Ltd. (NYSE: BABA) is now being reached, with the stock finishing on Tuesday at $173.73, a negative indication, especially when the S&P 500 Index is nearing new highs.
Indeed, Alibaba’s U.S. stock fell 4.9% due to a fresh wave of proposed restrictions, its lowest closing since October 2019.
BABA has been trading in the $173.15 – $216.39 range for the last month, and it is presently trading in the lows of this range. Prices have recently extended to the negative; therefore, investors searching for an entry point should wait for the downward trend to consolidate.
In terms of volume, BABA has an average of 17 million shares traded each day. Having an active stock is usually a positive thing. However, it appears that short-term momentum is negative based on previous performance and the fact that the price is below the 20-day simple moving average (SMA).
It is worth noting that the company’s stock is trading below its 20, 50, and 200-day simple moving averages, which investors generally use as uptrend indicators; with that being said, the short-term outlook is negative, as is the long-term trend.
Wall street analysts estimate
Despite the chart analysis, 23 Wall Street trading experts issued 12-month price forecasts for Alibaba based on its performance in the last three months. The average price objective for the stock is $272.82, with a high projection of $336.00 and a low estimate of $190.00. The average price forecast reflects a 57.04% shift from the previous price of $173.73.
Two TipRanks experts have suggested that BABA be held, while twenty-one experts have renewed their “Buy” recommendations in the past three months. It’s worth noting that none of them recommend selling. Accordingly, most experts think Alibaba to be a strong buy, with an average price target rise of 57.04% from the current price of $149.10.
China’s top market regulator issued new draft rules on Tuesday to prevent internet businesses from adopting forced exclusivity and blocking rivals’ connections and applications. The State Administration for Market Regulation (SAMR), which has led the government’s antitrust battle against Big Tech, has launched a new attempt to rein in the industry.
Furthermore, in April, China hit Alibaba with a record $2.8 billion fine for violating anti-monopoly rules. At that time, the penalty was another setback for the business, which has been under regulatory examination since last year. Also, state authorities stopped Alibaba’s fintech unit, Ant Group’s, initial public offering (IPO) in November, just days before it was set to begin trading in Shanghai and Hong Kong.