BABAF - Alibaba Stock: Stay Greedy The Catalyst Is Coming

2024-07-04 23:28:56 ET

Summary

• While Alibaba's Western peers keep shining, I think Alibaba's recent lackluster performance is due to the weakening of the Chinese economy.
• It's hard to believe, but with approximately half a trillion yuan in cash and equivalents on the balance sheet, BABA's current cash ratio is already 44%.
• I see an important bullish catalyst that may revive growth in undervalued Alibaba stock shortly.
• Technically speaking, the nearest strong resistance is 56-57% above current levels, which aligns with the significant discount the company's shares are currently trading at.
• I remain "greedy" so to speak, and intend to buy back any major dips from the current price levels.

My Thesis

In a way, I was fortunate to initiate my coverage of Alibaba Group ( BABA ) stock at the end of January 2024, during its lowest local price point, so I luckily managed to catch the local bottom for Alibaba stock at the time. Since then, the stock has only grown by 13.5%, whereas the S&P 500 index ( SPX ) has increased by almost 16%, highlighting the strength of the American stock market we've seen in recent weeks....

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