Earnings Rise, Revenues Miss

Shares in Chinese tech giant Alibaba are trading a little lower ahead of the open today. The move comes after a strong upward move last week in response to the group’s Q3 earnings. Alibaba reported Q3 EPS of $1.81 vs $1.68 expected. However, revenues came in a little weaker than forecast at $29.11 billion vs $29.28 billion forecast.

CEO Cites “Solid” Results

Commenting on the results, which he called “solid”, Chief Executive Daniel Zhang said in an accompanying statement:  “The uncertainties of the global landscape have only reinforced our resolve to focus on building capacity that will yield sustainable, high-quality growth for our customers and our own business over the long term.”

China Repoening in Focus

 Following the results, Alibaba shares rallied as the company outlined details of a huge new share buyback program. Alibaba extended the current $25 billion program by a further $15 billion, and extended the duration to 2025. Furthermore, looking ahead the group was optimistic on the lifting of COVID restrictions in China. While the China reopening story is certainly a major upside risk factor for the stock, traders will be keen to see how the Chinese government reacts to news of new COVID deaths in Beijing with fears of fresh lockdowns likely to be a downside catalyst.

Technical Views


 The rally off the 62.33 lows has seen Alibaba shares trading back up to test the 86.90 level, just ahead of the bearish trend line from YTD highs. With momentum studies bullish here, the focus is on a breakout higher and a move up towards the 110.48 level next while price holds above 76. Below that level, deeper support at 62.33 comes back into play.