Chart of the week – JD.com
JD.com bullish breakout from major base
Medium-term technical analysis
Source: CMC Markets
- Alibaba’s main e-commerce rival JD.com Q3 earnings that was reported on last Thursday, 18 November fared better that Alibaba where its revenue has managed to beat expectations; climbed to 218.7 billion yuan ($34.3 billion) compared with 215.6 billion yuan consensus estimates due to efforts to diversify beyond its traditional strength in consumer electronics and made a push into smaller cities by investing in new businesses such as community e-commerce. In addition, JD.com sales during the recent Singles’ Day shopping festival jumped 29% to a record of 349.1 billion yuan that outpaced Alibaba’s 8.5% growth.
- The share price of JD.com ADR listed on NASDAQ has staged a bullish breakout on last Friday, 19 November from a 6-month bullish “Inverse Head & Shoulders” configuration in place since 13 May 2021.
- The bullish breakout of the “Inverse Head & Shoulders” suggests that JD.com may have formed a major base after a -42% plunge from its 108.25 all-time high printed on 17 February 2021 to 19 August 2021 low of 61.76 inflicted primarily by the year-long of regulatory clampdowns on the technology platform sector in China. This price action move is significant as it may kickstart a new potential major (multi-month) uptrend phase for JD.com.
- The recent up move in price action from 9 November has been accompanied by an increase in volume which indicates an expansion in bullish accumulation.
- Watch the 76.65 key medium-term pivotal support for a further potential impulsive up move towards the current all-time high area of 104.55/108.25 in the first step. On the flipside, a daily close below 76.65 indicates a failure bullish breakout for a choppy decline to retest the major base support at 61.70.
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