BABA Is -28% Since October. Here's Its Chart Ahead of EarningsAlibaba Group Holding Limited Sponsored ADRBATS:BABAmoomooAlibaba BABA is down some 6% so far this year, and the U.S.-listed Chinese e-commerce giant's stock has fallen nearly 30% since hitting a roughly four-year high back in October. Let's see what BABA's technicals and fundamentals show as the firm prepares to report fiscal Q3 results later this week. Alibaba's Fundamental Analysis Alibaba, which is perhaps the best-known Chinese stock to trade in the United States, is set to release quarterly numbers ahead of the opening bell on Thursday. For the purposes of this article, I'm writing in dollar terms and charting Alibaba's American Depositary Receipts (ADRs), which list on the New York Stock Exchange. ADRs don't represent actual equity ownership in non-U.S. firms whose ordinary shares trade in their home market, and they might or might not equate on a one-to-one basis with said ordinary shares. (It depends on how the company set up its ADRs at the time it created them.) Analysts expect BABA to this week post $1.59 in adjusted earnings per American Depositary Receipt on $42.2 billion of revenue. While such revenues would represent 9%+ year-over-year growth from what Alibaba saw in fiscal Q3 2025, analyst estimates for the firm's adjusted earnings per ADR would mark a 46.1% drop from the $2.95 BABA reported a year earlier. In fact, 11 of the 15 sell-side analysts that I know of who cover BABA have cut their earnings estimates since the quarter started, while the other four have left their estimates unrevised. No analysts have raised their outlooks. Alibaba's Technical Analysis Next, let's look at BABA's chart going back some seven months and running through Thursday afternoon (March 12): Readers will see that BABA performed well coming out of a falling-wedge pattern of bearish reversal in early January (denoted by the tan shading at the chart's center). However, that rally has already faded, and it looks like BABA might now be a little more than halfway into developing a possible inverted head-and-shoulders pattern of bullish reversal. Marked with green boxes at the chart's right, this apparent pattern has a potential $156 pivot. However, keep in mind that this is still hypothetical in nature. Meanwhile, other technical indicators shown above aren't in great shape. For instance, Alibaba's Relative Strength Index (or "RSI," denoted by a gray line at the chart's top) is mired at levels close to technically oversold. At the same time, the stock's daily Moving Average Convergence Divergence indicator (or "MACD," marked with blue bars and black and gold lines at the chart's bottom) is rather bearish-looking, although it's at least been improving. The histogram of the stock's 9-day Exponential Moving Average (or "EMA," denoted by blue bars) is currently negative, but it's been moving upward towards the zero bound. Similarly, Alibaba's 12-day EMA (the black line) and 26-day EMA (the gold line) are also both in negative territory, but the black line looks like it's possibly moving towards crossing above the gold line. Such a crossover would be a bullish signal. An Options Option Some options traders looking at the above technical picture are likely going with a bull-call spread heading into earnings. That involves buying one call option and simultaneously selling another with a higher strike price, but where both expire on the same day. Here's an example: -- Long one BABA call with a March 20 expiration date (i.e., after earnings) and a $145 strike price. This cost about $1.45 at recent prices. -- Short one BABA March 20 call with a $155 strike price. This would bring in a $0.45 credit at recent prices. Net Debit: $1. Traders are risking the $1 net debit to try to bring in $10 for a $9 net maximum theoretical profit. These investors would receive this $9 if BABA trades at or above $155 at expiration. Conversely, investors would face a $1 maximum theoretical loss (i.e., the entire net debit) should BABA trade at or below $15 at expiration. (Moomoo Technologies Inc. Markets Commentator Stephen "Sarge" Guilfoyle had no position in BABA at the time of writing this column.) This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. 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