Alibaba Group Holding Ltd. ADS Using a "In Favor" Strategy

Jack Ma, Executive Chairman of Alibaba Group Holding Inc.

You may recall several financial blogs back when I told you that one of my friends wanted to know if I was going to buy Alibaba (Stock Symbol: BABA) when it came to the market on an IPO. She bought the stock at $90.00 per share.  Then the stock went up to $99.00 before the market corrected and the stock fell to about $86.00.

As I told you before, I usually do not buy stock for my account but I do buy stock for my friends accounts. October is the time that I divest accounts and at the end of October, I buy stock in anticipation of the "Year End Rally." On October 30th and 31st, I started buying Alibaba stock at $99.50. The stock hit a yearly high of $120.00 and a low of $82.81 per share.  As of the date of writing this blog, the price is $115.10.

 Why did I start buying this stock? I did because Alibaba is "In Favor" with investors.  I will sell this stock when my friends need the money or when Alibaba falls "Out of Favor"  with investors.

 

Why is it "In Favor?"

Alibaba.com mainly links Chinese suppliers to foreign buyers. Alipay, a privately owned affiliate that’s not part of the listed Alibaba Group, functions as the equivalent of PayPal in processing 75 percent of the group’s transactions.

Alibaba’s customers trade anything and everything, from silkworms to Boeing 747s. The family of Ma Yu, a Starbucks barista in Ma’s hometown, likes buying cooking oil, sacks of rice and toilet paper.

“It’s even cheaper than supermarkets, and you get way more choice according to experts.

Some $248 billion flowed through Alibaba’s retail portals last year, equal to 2.6 percent of China’s $9.38 trillion gross domestic product.

On Nov. 11, 2013, the Chinese twist on Valentine’s Day known as Singles Day, Alibaba logged $5.75 billion in transactions. By contrast, Cyber Monday 2013, the biggest U.S. e-commerce day, rang up less than $2 billion.

For this year’s Singles Day, Alibaba is becoming even more ambitious, staging the promotion globally. It’s targeting $8.2 billion in transaction volume, according to Bloomberg Intelligence.

Alibaba is making money: Net profit tripled to $3.7 billion in the year ended on March 31. While net income fell 39 percent in the three months ended Sept. 30, in part as a result of the cost of integrating new businesses, revenue jumped 54 percent during the quarter -- beating analysts’ estimates.

“The growth potential of Internet companies in China is many multiples greater than in the U.S.,” says Shane Oliver, who helps manage $131 billion at AMP Capital Investors in Sydney. “Businesses which can take advantage of that, such as Alibaba, seem incredibly attractive.” In line with AMP policy, Oliver declined to say whether his firm bought the stock.

Institutional Investors

BABA stock was so popular among institutional investors that the two major IPO ETFs fast-tracked it for inclusion in their funds well ahead of their usual considerations. The Renaissance IPO ETF (IPO) added Alibaba stock to its fund after five days of trading. The bigger First Trust US IPO Index Fund ETF (FPX) added Alibaba stock on Sept. 19, its first day of trading, because it happened to coincide with the date of its quarterly rebalancing. Normally, FPX only adds stocks that have traded for at least seven days.

You get a technical analysis on this stock by clicking on the picture. If that does not work for you, click on the link.

https://www.youtube.com/watch?v=UpGHCsF9NLI

Alibaba Group Holding Ltd (BABA) Stock Chart Technical Analysis for 11-14-14  

 

If you want other technical analysis on other stocks, click on the link below.

 

https://www.youtube.com/channel/UCn2JOViAAWssWefchGpTNvw

 

EXXON Using a Buy and Hold Strategy

Price of Fuel

We are in the month of November.  As I told you in early October, I do not buy investments in the month of October. In fact, I am basically a noninvestment grade corporate bond investor.  But I do buy some stock and I buy stock for my friends with their money.  I sold their stock in early October and bought in late October in anticipation for  the yearend rally.

On October 30th, I started buying Exxon Mobil Corporation (Stock Symbol: XON)for my friends using a "Buy and Hold" Strategy.  The high this year has been $104.76 and the low has been $86.91. The lowest that I received for my friends has been $97.11. The price as of the time I am writing this article was $96.50.

Gas Pumps

Exxon Mobil Corp.'s stock recorded a trading volume of 13.23 million shares, above its three months average volume of 11.80 million shares. The company's shares oscillated between  $95.72 and $97.16 during a recent session. Over the last three trading sessions and over the past one month, Exxon Mobil Corp.'s shares have advanced 2.19% and 2.09%, respectively.

However, the stock has fallen by 4.56% since the start of this year. The stock is trading above its 50-day moving average of $94.99, while the 50-day moving average is below Exxon Mobil Corp.'s 200-day moving average of $97.89. Additionally, the stock traded at a PE ratio of 12.16 and has a Relative Strength Index (RSI) of 59.09.

 

In my opinion, this means that XON is at or near its bottom prices. This stock is ideal for buying a little each pay and selling at a higher price. This is called a "buy and hold" strategy. The best account to use for people with very little means to invest is the Sharebuilder's Plan.

People have a mono-view of things. Looking at the oil market is no different. People think that because gasoline prices are falling, that this is a "win-win" for the public. Such people do not know how the economy works. For example, low price oil can put fracking oil producers out of business and furlough workers. Fracking Oil Supply Companies will suffer and people will be furloughed.

 

To watch this video, click on the picture. If you do not support this type of video, click on the link below.

 

https://www.youtube.com/watch?v=qY9z-26rnQw

 

Plunging Oil Prices Have Unpredictable Impact on Politics, Economics

Exxon Corporation can produce profitable oil even if they shut down fracking operations and will have plenty of oil ready for a rising oil and gas market, meaning the price of XON will rise.