And analysts say the stock could go far higher than that. Here’s why.
As the U.S. and China get closer to signing a phase one trade deal, Chinese stocks are starting to break out.
Over the last week, the iShares China Large Cap ETF is up 3.29%, and MKM Partners chief market technician, J.C. O’Hara, says one stock in the ETF could soon surge far higher.
“The charts have definitely seen some notable recent strength, but I don’t know if they’re just out of the woods yet,” O’Hara told CNBC.
But for Alibaba (NYSE: BABA), O’Hara says the stock could climb more than 14% in the near term.
“If you go back over the last 12 to 18 months, you do see a series of higher lows in place, and that’s definitely positive, but there’s still a series of lower highs,” O’Hara said. O’Hara continued that he remained “cautious” on the stock until it broke above $185, and on Thursday, it did just that.
“We get positive above that $185 level because above $185, we think there’s a clear shot to the 2018 highs at $210,” O’Hara said. “So that’s why i turned incrementally more positive.”
Alibaba’s record high last year was $211, or 13.9% higher than the current price. And analysts say it could climb even higher.
The consensus price target on BABA is $225.87—21% higher than the current price—with Benchmark analyst Fawne Jiang calling Alibaba the Chinese “e-commerce category killer” late last week.
Tocqueville Asset Management’s John Petrides says Chinese stocks as a whole are starting to look better.
“We think the large-cap tech social media giants in China are quite attractive particularly over the long term,” Petrides said. “They generate a ton of cash flow, the demographics are in favor and… in September, the risk was that the U.S. may delist Chinese securities. That does seem to be behind us, which I think provides a valuation opportunity.”