Third pick on Alibaba ! Does it make sense ?!

For this week, we decided again to get our 3rd position in Alibaba out of our 6 picks made. That allocate 50% of our portfolio to Alibaba.

Causes of such are many, we can short them in below list.

1. Alibaba is currently traded on the lowest price for the last 6 months. It is actually the largest technological public company in China, the 2nd largest economy in the world after US.
2. Our attention for the 3rd position is to average our price as the picks were bought at $85 then $90 prior to the financial report, then $80, averaging our cost at $85.
3. We noticed many swings in Alibaba, 3rd position is already in open sell position at $85 balancing between investment and trading.
4. Alibaba last report this month beaten the estimate, but market didn’t react. The share is already down at bottoms, so, the share is not inline with reality. Estimates for next quarters are much higher, expected high profits by end of 2023 and we need to prepared for that. Next quarter suppose to have the highest growth that will be announced after 3 months on August.
5. China economy suffered of Covid-19 restrictions and it was one of the latest country to open at December 2022. After that and beginning of 2023, cases soared. So, we expect instability in the economy and companies. Actually this is one of the main drivers to be in Chinese stocks. The dark side will soon vanish and the future is bright and this is what we want. To be ahead of the market itself.
6. China president committed to transfer China to a middle economy country targeting an average above 6% annual growth for years.

The close of Alibaba below $80 should not last long, otherwise it will be a technical sign of further lower price. Below 6 months trade of Alibaba.

Below data from Nasdaq for this estimate beat and next high estimates for 2023. As per Nasdaq, Alibaba always beaten the estimates of profits. Nasdaq estimates a lot better results in the coming quarters of 2023.

We already highlighted a lot about China economy and Alibaba in particular in this post and others. We decided that we will be balancing between investing and trading in Alibaba. We will be keeping at least 2 picks for long investment. We believe that We are within the main drop of Alibaba and currently we are in collecting phase, awaiting the next raise phase at end of 2023.

China’s commitment to technological advancements, innovation, and the digital economy has accelerated. The government’s focus on initiatives such as Made in China 2025, the development of 5G infrastructure, and advancements in artificial intelligence and robotics positions China for sustained economic growth in the coming years. China is expected to continue its economic recovery and achieve significant growth in the post-COVID-19 era.

Where our portfolio now?

Continuation to our transparency, again we dropped below major indexes, but still within sight. Major driver now is Alibaba, but that will be covered if Alibaba crossed $85 which we have trust on.