The first trading day of 2018 saw the major indexes climb considerably higher and clothes very strong and active trading getting the new year started. The strength was across many sectors of the market, and in particular of note were the Chinese related Stock names.

It appears that on Friday of last week, some regulatory changes were passed in China as well as a Chinese economic indicator(known as the (Caixin/Markit Purchasing Managers’ Index) was found to be showing positive effects on their economy. Some of the other strong Chinese names were Autohome (ATHM), JD.com (JD), 58.com (WUBA) and YY (YY).

Shares of BABA gapped up strong as soon as the opening bell rang at 9:30 on the New York Stock Exchange. Shares stayed in a strong uptrend closing at $183.65 which was up $11.23 for up 6.51%.

The aftermarket was quiet and only saw the shares  go up an additional $0.45. It’s difficult to say if these Chinese names would have rallied as much as they did if the overall us markets didn’t rally as much as they did.

It will be interesting to see as the week unfolds which areas of the market stay strong and which areas may fall prey to profit taking.

BABA Chart

(Click on image to enlarge)

The above price chart shows the daily action going back roughly 6 months in Alibaba. Note the  shaded oval area, where on Monday  shares gapped up at the open of trading and closed over the yellow dots which is the 50 period moving average. This is an area widely known and used by many longer-term investors and money managers.

One small setback for Alibaba came today when it was announced that a company that Alibaba founder Jack Ma owns ,was prevented from purchasing a US based money transfer company named  MoneyGram International over National Security concerns.

It did not seem to affect the performance in Alibaba share price today but going forward if Alibaba faces similar hurdles it could possibly disrupt earnings growth.