Shares of JD.com are perking up this morning. The stock gaining just over 5% and is very near a new October high. At mid day JD is the #2 gainer in the Nasdaq 100 Index as it extends its streak of higher monthly lows to seven straight. JD’s divergent action this week is quite notable. As the QQQ was blowing out its previous week’s low early yesterday, and eventually reaching a fresh October low, JD remained in a tight range while putting in a fifth straight higher weekly low.
JD has been consolidating since its powerful post earnings surge(Aug. 17) ran out of steam in early September. During this phase the stock reached record overbought levels in both the daily and weekly MACD indicators. JD has worked off this extreme condition without giving back much ground.
The 50 day moving average has been very supportive since shares lifted off the March lows. This solid footing remains intact.
We consider JD a very low risk buy at current levels. On the downside a close below $79.00 would violate last week’s low indicating more consolidation is ahead. On the upside, a clear take out of the $87.00 area would push shares past the September spike high. JD would then have a clear path higher.
Long JD in some managed accounts. JD.com is scheduled to report Q3 results on November 13/AM
More on E-commerce and JD.com from Zacks: https://www.zacks.com/stock/news/1087957/ecommerce-to-drive-holiday-retail-sales-5-winners?cid=CS-MKTWTCH-HL-analyst_blog|investment_ideas-1087957&mod=mw_quote_news