NEW YORK (TheStreet) -- Shares of Alibaba Group Holding Ltd (BABA) 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 RealMoney.com. 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.
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.