NEW YORK (TheStreet) -- Shares ofAlibabaGroup Holding Ltd (BABA) - Get Report were gaining, higher by 1.16% to $91.75 in early market trading Thursday, after analysts at Sanford C. Bernstein initiated coverage on the Chinese ecommerce giant earlier this morning.

The firm issued a "high conviction outperform" rating with a $120 price target on shares, saying Wall Street is underestimating the company's growth potential.

Alibaba is a China-based online and mobile commerce company in retail and wholesale trade, as well as cloud computing and other services.

Insight from TheStreet's Research Team:

Alan Farley commented on Alibaba in a recent post on Here is what Farley had to say about the stock:

Alibaba (BABA) came public near $93 in September and topped out at $120 in November. The subsequent decline accelerated in January, cutting through the IPO price and dropping into a sideways pattern with support at $80. Range support broke earlier this month, ahead of a post-earnings rally gap that settled near a three-month high. It's hard to tell at this point if the stock is trading at old resistance or new support.

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The range printed rising highs, with the recent rally stalling at the trendline, but strong volume and six-day price action above the 50-day EMA may indicate it's already broken out. Along with expanding lows, price could be carving a broadening formation that won't please either side in coming weeks. For now, bulls have the advantage, but they need to prove they're serious with a rally above $90. Even then, the big unfilled gap between $91 and $98 should limit upside potential well into the summer months.

- Alan Farley, 'Has Alibaba Already Broken Out?' originally published 5/15/2015 on

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