JD.com or Alibaba - which stock offers greater upside potential right now?

Taking a look here at both JD.com and Alibaba from a technical perspective and the potential upside these two Chinese e-commerce stocks may offer in the longer term. The first one is JD.com, its US ADR stock is trading at around $29.98 a share right now. On the weekly chart, we can see a potential breakout towards the upside, on the week commencing 13^th of May the price broke above the long-term resistance trendline. However, it has since pulled back, perhaps in order to re-test new support levels. The support reads $29.55, which currently is located along the ascending trendline. A break below this trendline could then see a further decline towards the next support price level of $24.66, this would raise concerns about the possibility of a false breakout. Towards the upside, resistance is once again along the trendline reading $30.34, a close above this level may spark some optimism amongst investors. Upon a clear break above this level, traders could then eye the levels of $33 and then back up to $35.67. What is interesting to see here is at the bottom of the chart, the technical indicators are suggesting a potential bullish divergence. A bullish divergence occurs when a stock’s price continues to create lower lows but the indicator is forming higher lows. This suggests a shift in sentiment. However, this is not always the case. But as we can see below the MACD is doing just that and the RSI is now reading 52, from a reading of 33 in January.

According to TipRanks, these are the following 12-month price targets for JD.com:

Average price target - $38

High PT - $55

Low PT - $27

Over to Alibaba whose stock (ADR) is trading at around $79.11 a share. Also taking a look at the weekly interval, we can see that similarly to JD.com, the price has surged in this instance but then sold off in the following couple of weeks. This can sometimes occur after a breakout where traders and investors cash in some of their profits, as a result, sending the price lower. However, on some occasions, this can be seen as the stock adjusting itself accordingly to the market’s liquidity, and longer-term holders would continue holding. The near-term support is last week’s low of $79.72, a break below this level could lead stall the momentum and see a pullback toward that range of $70-$75. On the other hand, towards the upside, the resistance can be spotted around $82.68. A close above this level may ignite a rally back towards this year’s highs of $89-$90. Looking at the technical indicators, they are pretty neutral right now with no clear indication of future price movement. The MACD is positive but has now slightly curved lower and the RSI reads 51 from the previous 65 back in May.  

12-month price targets for Alibaba:

Average PT - $103

High PT - $124

Low PT - $80

(Sources: tipranks.com)