Alibaba Stock Price Forecast: A Reversal In Play As Bullish Momentum Set to Strengthen

Summary:
• Alibaba stock price prediction article, we tell you why the last quarter of the year could be the best yet for the stock this year.

Alibaba’s NYSE-traded stock price rose in the pre-market session on Monday, gaining 1.1 percent and trading at 99.10 at the time of reading. After previously signaling the potential for a possible upswing, the stock broke below the psychological $100 mark three sessions ago, sending mixed signals in the market.

In October, China’s manufacturing activity rose for the first time in six months, bringing reprieve on the status of the world’s second-largest economy. According to data released on Friday, the country’s Caixin Manufacturing PMI rose to 50.3 percent in October, up from September’s 49.3. A reading above 50 denotes growth.

China announced a stimulus program in late September to support its troubled economy, which had been on a downturn for the better part of the last year. Therefore, the strong manufacturing data could signal initial success of the program. Furthermore, that is significant for Alibaba stock price, as China is the company’s largest market.

As far as the technicals go, the company’s forward price-to-earnings ration is 11.2 times its earnings, which is an impressive figure for a company of its magnitude in the industry. Meanwhile, Alibaba (NYSE: BABA) will release its quarterly earnings on November 15, and that could increase volatility in the coming days. According to TipRanks, the average 12-month Alibaba stock price target is $125.11, based on 19 Wall Street analysts. That is about 28 percent above Friday’s closing price of $97.58.

Alibaba stock price forecast

The momentum on Alibaba stock price calls for further upside above the pivot mark at 99.05. That will likely encounter the first resistance at 99.70. However, extended bullishness could breach that mark to test the second resistance at 100.30. Conversely, the sellers are likely to take control if the price goes below 98.50.

That will likely find initial support at 99.05, but a stronger downward momentum could break below that level to find the first support at 98.50. That will invalidate the upside narrative and the price could test the second support at 97.70.