Alibaba, Tencent, JD.com Lead 5 Top Chinese Internets That Just Carved New Buy Points

Several top-rated Chinese internet stocks just popped back on the radar. Alibaba (BABA), JD.com (JD), Tencent (TCEHY), YY Inc. (YY) and 58.com (WUBA) now have proper bases after consolidating for six weeks. That means they all have proper potential buy points.

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Alibaba and messaging giant Tencent are archrivals, while JD.com is Alibaba’s top competitor in e-commerce specifically. Tencent is JD.com’s top investor as part of a strategic alliance. YY Inc. and 58.com both reported better-than-expected earnings last week, but gave weak guidance. JD.com also recently gave weak guidance.

Alibaba

Alibaba shares rose 6% last week to 190.55, retaking their 50-day moving average. The stock now has a 206.30 buy point.

However, Alibaba’s relative strength line, which tracks the stock’s performance vs. the S&P 500 index, has not made much headway in more than six months, and lagged gradually since late November. The RS line is the blue line in the charts below.

JD.com

JD.com stock climbed 4.3% last week to 45.70, closing just below its 50-day line. JD.com has a 50.78 buy point.

Like Alibaba, JD.com’s RS line has moved sideways since August.

Tencent

Tencent climbed 4.1% to 58.17 last week, retaking its 50-day line. Tencent, which runs Wechat and has stakes in a wide array of Chinese internets, has a 61.10 buy point. At first glance, Tencent appears to have a handle, which would offer a lower buy point. But while Tencent has consolidated for six weeks, the minimum for a cup-without-handle pattern, a proper cup-with-handle base requires at least seven weeks.

Tencent’s RS line hasn’t made progress since late November, but is near record highs.

YY

YY plunged 10.3% to 110.99 last week, tumbling through its 50-day/10-week line in huge volume, a notable sell signal for YY stock. The livestreaming platform topped earnings views late Monday, but YY offered weak revenue guidance. YY has a 143.07 buy point, but after last week’s bearish action, the stock may need some time to bounce back.

58.com

58.com, known as the Craigslist of China, is an online classifieds operator. Shares rose 7.8% to 82.81 after some up-and-down trading following 58.com’s earnings report and guidance.

The stock is approaching an 87.75 buy point.

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