Chinese companies like Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD) were all the rage until they weren’t. As with many publicly-traded firms during this year, BABA stock got off to a promising start in the first half. But in the second, the trajectory completely reversed.

Presently, Alibaba stock is staring at losses exceeding 15% year-to-date. It’s a familiar tale among popular Chinese investments, including Weibo (NASDAQ:WB) and Tencent (OTCMKTS:TCEHY). The obvious culprit is President Donald Trump. He promised the return of law and order, and he’s so far lived up to this image.

After threatening tariffs on Chinese exports earlier this year, the Trump administration unleashed its first volley of economic penalties. As tensions ratcheted up, BABA kept falling. At no point in our recent history have the Chinese experienced a president like the one currently sitting in the White House.

Then again, I can say that about any of our international partners.

But after the contentious midterm elections, momentum at least temporarily shifted towards Alibaba stock. The day after the ballots closed, BABA gained more than 3%. Is this a small, but significant sign that the worst is over?

Let’s take a look at the pros and cons of buying BABA stock:

Why You Should Buy BABA Stock Right Now

Generally, I’ve been cautious on BABA stock mostly because the U.S. and China have stark differences in transparency. More than a year ago, our own Lawrence Meyers stated bluntly, “Fraud is simply a way of life in China, and that is the primary reason I have no interest in Alibaba.”

I agree with him. At the same time, the markets have proven my bearishness dead-wrong. As anybody with functioning eyes can see, BABA had a solid year in 2016, and a stunning one in 2017. Alibaba stock was on the verge of repeating profitability for shareholders when it got Trumped.

Down came BABA like a Floridian thunderstorm. But rather than relish in the fact that I finally got Alibaba right for a change, I had another thought: the only thing that changed in the calculus was Trump. Had he and Chinese President Xi Jinping decided to go out for wontons instead of tariffs, Alibaba shares would be in a very different position.

The other factor potentially driving BABA stock is the midterm-elections results. President Trump now has a split government with which to contend because the Democrats took the House. That draws the specter that they will push for impeachment, something which Trump evidently fears greatly.

With the President in a distinctly-compromised position, this could help move Alibaba stock and all Chinese companies higher.

Why You Should Wait out Alibaba Stock

BABA bulls are adamant that Alibaba shares more in common with Amazon (NASDAQ:AMZN) than any other company. Just like AMZN, Alibaba is more than just an ecommerce play. The Chinese powerhouse levers tremendous influence in cloud computing.

It’s also a data gold mine. As the BBC reported, the company’s “Singles Day” is the biggest online shopping day in the world. But as they argued, BABA benefits on two fronts: the sales and the data. As shoppers surge onto the platform, algorithms track user activity. Alibaba later shares this information with its partner companies, allowing them to market more junk to you.

This is an ingenious business concept. It may also not matter one bit for BABA stock.

Here’s the thing: unless an impeachment occurs, President Trump still has two more years. Even if he is impeached, as Canadian Will Ashworth mentioned, Mike Pence would take the helm. Plus, Pence is a veritable Japanophile, so he wouldn’t necessarily mind adopting Trump’s anti-China stance.

Should the upcoming negotiations between Trump and Xi not go well, Alibaba stock could fall even further. The other scary thing is my earlier point: China lacks transparency. If that were not the case, we wouldn’t threaten a trade war!

I understand that Trump isn’t everyone’s favorite president. But that doesn’t mean that everything he does is without merit.

The Final Verdict on BABA stock

With such stark and conflicting fundamentals, it’s extremely difficult to call BABA at this juncture. However, I’m not employed as a Russian spy, so I can’t leave loose ends. Here’s my final verdict:

Since the positive and negative fundamentals largely balance out in my opinion, I’m putting the most weight on the technicals. The bears had multiple chances to drive Alibaba stock lower in October but failed. Moreover, the midterm elections are net positive for foreign companies as the Democrats will demand rational economic policies.

Therefore, I believe we have a favorable environment for BABA. Still, it’s not dramatically advantageous. If you’re interested in Alibaba, take a modest position now but keep the powder keg dry. Continued discounts are not out of the question.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.