Is Alibaba a buy or a sell in November?

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Even with the COVID 19 pandemic, Alibaba’s business is going very well
If the price jumps above $320, the next target could be $330 or even $350
Alibaba invested $3.6 billion in Sun Art Retail to capitalize on opportunities in the Chinese retail sector

Alibaba (NYSE: BABA) shares rose from $266 to $310 in less than a few weeks, and the current price is around $309.

Fundamental analysis: Alibaba continues to dominate the Chinese e-commerce market

Alibaba Group Holding Limited is a Chinese multinational technology conglomerate that specializes in e-commerce as an online trading company with hundreds of millions of users in its Taobao, Tmall and Alibaba.com marketplaces. Alibaba’s current upward price trend, which began in early 2019, is still intact and this stock could reach $400 by the end of November, according to analysts.

Even with the COVID 19 pandemic, Alibaba’s business is doing very well, and the company will see an increase in revenues for the next financial year. The company increased its revenues for the fiscal year 2020 from $56.14 billion in 2019 to $71.96 billion, and the growth projects will ensure that the numbers will continue to rise in the future.

The company’s operating cash flow has grown over the last ten years, but Alibaba is investing heavily in its logistics network. Alibaba continues to dominate the Chinese e-commerce market with a 62% share of the consumer retail market.

The Chinese e-commerce market has grown at a rate of 38.22% and is expected to grow further due to increasing consumption. This is certainly positive for this company, as the explosive growth of e-commerce sales in China will only strengthen Alibaba’s position.

Alibaba recently invested in Swiss duty-free retailer Dufry AG, and these two companies will also form a joint venture combining the digital know-how of the technology giant with Dufry’s travel retail business. Alibaba has also invested $3.6 billion in Sun Art Retail to capitalize on opportunities in Chinese retail.

It is important to note that Alibaba faces competition from JD.com (JD), Tencent and Baidu, but analysts believe Alibaba can sustain its dominant market position. There are some obvious risks involved in trading these stocks at the moment, but Alibaba’s stability and size will always attract potential investors and traders.

Technical analysis: The current uptrend remains intact
Data source: tradingview.com

As long as the price is above this trend line, this share is in the “buy” zone and there are no signs of a trend reversal. If the price falls to the trend line and we get a “bullish” confirmation candle, this would be a very good entry point for short term traders trading “stop loss” and “take profit” orders.

The trend line represents a very strong support level, if the price breaks through this trend line, it would be a very strong “sell” signal and we have an open path to $260. A rise above $320 supports the continuation of the bullish trend for Alibaba, and the next price target could be around $330 or even $350.

Summary

Even with the COVID 19 pandemic, Alibaba’s business is doing very well and the company will see an increase in revenues for the next financial year. The company’s operating cash flow has grown over the past decade, but Alibaba is investing heavily in its logistics network. At its current share price, Alibaba could be a very good short-term investment, but with a market capitalization of $828 billion, I think it is overvalued.

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