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Alibaba Stock Forecast: BABA Dips To Fresh Yearly Lows

Alibaba BABA

Alibaba stock price (NYSE: BABA) has just made fresh yearly lows despite an increase in global sales. The Chinese e-commerce giant recently released its earnings report. While the report showed an increase in international sales, sales within China fell by 1%.

On Tuesday, Alibaba Hong Kong stock (HKG: 9988) which is denominated in Hong Kong Dollars, tanked by 3.24%. This means that the NYSE: BABA will also likely show a negative price action when trading begins.

Why Is Alibaba Stock Falling?

According to the latest Alibaba news, the company’s international sales increased by 18% during Q3. However, the 1% decrease in sales in mainland China offset this increase and adversely affected the NYSE: BABA. On Monday, Alibaba stock price closed in the red for the sixth consecutive day.

The price is currently trading at $89.25, 27% below its year high of $121.3. Apart from reduced sales in China, the price is also getting affected by the hawkish Fed policies. Most tech stocks have shown a similar price action in February due to increasing inflation and upcoming rate hikes.

Despite the recent bearish price action, the notable investor Michael Bury is still bullish on the BABA. The latest 13F filing from the Big Short investor revealed that he is holding a long position with an entry at $88.

Alibaba Stock Forecast -1D Chart

The NYSE: BABA chart shows a sideways price action for the last 1 year. The price rallied at the start of 2023 but failed to break above the range high of $125.5. The price made fresh yearly lows in February after wiping off all the January gains.

The most concerning thing on the chart is the fact that the price has broken below the 200-day moving average. The 4-month-long uptrend that started in October last year has also been broken. My Alibaba stock forecast will remain bearish as long as the price stays below $125.5 level. Only a reclaim of this level on a weekly timeframe can signify a bullish reversal.

Alibaba stock chart
Alibaba Stock Price (NYSE: BABA) Chart 1D