If you think that the FAANGs -- Facebook (FB) , Apple (AAPL) , Amazon (AMZN) , Netflix (NFLX) and Google (aka Alphabet Inc. (GOOG) (GOOGL) ) -- are where all the tech sector action has been in 2017, you're sorely mistaken. That's because one gigantic tech stock has eclipsed the performance from all of those other tech sector stalwarts year-to-date.
I'm talking about Alibaba Group Holding Ltd. (BABA) .
While China hasn't been grabbing U.S. investors' attention in a meaningful way this year, BABA should be. That's because this gigantic e-commerce platform has been expanding its reach into the big data and cloud-computing space in the People's Republic, a market that's rife with opportunities right now.
Shares of Alibaba have more than doubled since the calendar flipped to January this year, up more than 103% in total. And that momentum run isn't showing any signs of fatigue this fall.
In fact, shares of Alibaba are within striking distance of a completely new buy signal. To figure out how to trade it, we're turning to the stock chart for a technical look at what's happening in the price action right now.
Simply put, Alibaba's price trend hasn't been hard to spot this year. Shares have been charging up and to the right all year long, rallying in a reasonably well-defined parabolic uptrend. More recently, that uptrend has started to slow, but it's not cause for concern -- instead, the price action is forming a rough version of an ascending triangle setup, a bullish continuation pattern that could signal higher ground ahead.
Alibaba's setup is formed by horizontal resistance up above shares, with uptrending support to the downside. BABA's resistance level is a range -- but the most conservative approach puts the buy signal on a breakout above $185, the most recent swing high for this stock. Simply put, a material push through $185 is our signal that buyers are still squarely in control of shares of BABA as we head into the final stretch of 2017.
Relative strength continues to be a critical gauge of Alibaba's ability to outperform this year. The uptrend in relative strength is our signal that Alibaba's relative performance over the rest of the broad market continues to be positive - in other words, as long as that uptrend remains intact, BABA shares are statistically predisposed to keep on outperforming.
That's all good reason to keep a close eye on the $185 level this October -- BABA is close to breakout territory once again.
Jim Cramer also thinks Alibaba is one of the companies leading the pack when it comes to AI:
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