The bounce from Wednesday’s selling spree continues suggesting that the market may have simply overreacted to the political headlines — shocker! As we mentioned yesterday, the dip in prices may prove to be nothing more than an opportunity to buy a dip.
Continuing on that theme, today’s three big stock charts look at shares of Alibaba Group Holding Ltd (NYSE:BABA), McKesson Corporation (NYSE:MCK) and Analog Devices, Inc. (NASDAQ:ADI), all of which are showing further potential for upside based on their charts.
Alibaba Group Holding Ltd (BABA)
Alibaba took a big dip after their earnings on Thursday, generating an opportunity for investors to grab this market-leader after it has reloaded for another climb higher.
BABA shares of the online retailer almost touched-down on their 50-day moving average on Thursday, close enough for the technical traders to jump on the bullish bandwagon, which really isn’t a bandwagon at all.
According to our data, Alibaba short sellers had been loading-up on bearish bets ahead of the announcement, indicating that a short covering rally was likely to move the stock higher. In BABA’s case, the dramatic selloff followed by support from the short-term selloff triggering the covering rally.
From here, shares of Alibaba are getting a lift from breaking above the $125-level as the shorts cover and the analyst tout the upside potential.
McKesson Corporation (MCK)
One of the industrial names that has been caught in the political turmoil is McKesson Corporation. MCK stock headed into its earnings announcement trading with some increased volatility and trading into resistance at the stock’s 50- and 100-day moving averages.
This morning’s post-earnings move takes McKesson stock above this resistance at the same time that it ascends above the longer-term 200-day moving average. This is an incredibly bullish move that will attract technical traders to the name.
From a fundamental perspective, MCK will benefit from infrastructure spending, regardless of what happens with the current administration. This is the fundamental driver behind the stock’s move.
McKesson stock’s 50- and 100-day moving averages were in the process of shifting into a bullish outlook as both are beginning to trend higher. Today’s move will conform and strengthen that outlook. The technical target based from the chart is $170 over the short-term.