The fact that Alibaba’s (NASDAQ:BABA) shares are near the lower end of their five-year trading range suggests that there are elevated concerns regarding its future prospects. Risks associated with BABA stock include concerns about the economy, political tensions between China and the U.S., fines levied against the business, and new industry regulations. The focus on its own ChatGPT-like model may support its growth, but the technical indicators are currently giving off a bearish signal, suggesting that it is time to sell the stock at the current price.
According to TipRanks’ technical analysis tool, Alibaba stock’s 50-Day EMA (exponential moving average) is 94.50, while its price is $86.89, making it a Sell. Further, BABA’s shorter duration EMA (20-day) also signals a downtrend.
Further, its RSI (Relative Strength Index) of 41.27 implies a Neutral signal near the current levels. Based on Pivot Points, the stock has the next level of resistance near $93 (see the graph below).
What’s the Prediction for BABA Stock?
Overall, Alibaba is a Sell based on TipRanks’ easy-to-understand summary signals (which combine the moving averages and the technical indicators into a single, summarized signal).
The company’s broad overhaul plan, which involves splitting the company into smaller, economically viable units, is likely to help drive growth. Also, its plan to improve capital structure by selling off less strategic investments will unlock greater shareholder value.
Wall Street is optimistic about Alibaba, with a Strong Buy consensus rating based on 17 unanimous Buys. The average BABA stock price target of $149.88 suggests 72.4% upside potential.
