On Tuesday, the Alibaba share price action showcased a market opening dip, as the company grew its revenues by 34% but missed analysts’ estimates.
Revenues rose from 153.75 billion yuan in Q2 2020 to 205.74 billion yuan but did not meet the forecast of 209.34 billion yuan. An easing of pandemic restrictions that allow more users to shop offline than on online channels is partly blamed for the result. Increasing competition and regulatory crackdowns on the company in China are also of concern to investors.
Nevertheless, the company is proceeding with a share buyback program that will see $15 billion worth of shares repurchased. The Alibaba share price is down by 2.28% as of writing.
The intraday dip in price is testing support at 193.92. A breakdown of this price level sends the Alibaba share price towards 182.26, below which the 19 March 2020 lows at 170.03 become the next target for sellers.
If the price dips to 182.26 and bounces from there, a potential double bottom forms. This pattern would depend on a break of a potential neckline at 193.92 for a move higher towards 198.97. It may even go as far as 204.32 if the bullish momentum from such a breakout move materializes. Otherwise, a bounce on the current support at 193.92 would also be good enough to challenge 198.97, with 204.32 and 208.01 serving as potential upside targets.