Alibaba Shares Face Headwinds Amid Economic Concerns

Recent macroeconomic data from China has cast a shadow over Alibaba's stock, highlighting the e-commerce giant's vulnerability to shifts in domestic consumer sentiment. Disappointing retail figures released at the start of the week triggered a sell-off, placing significant pressure on the share price.

The primary catalyst for the downturn was a key report from Beijing. In November, retail sales in China expanded by a mere 1.3%, marking the slowest pace of growth since 2022. This figure fell well short of market forecasts, underscoring a persistent caution among consumers in the world's second-largest economy.

For a company like Alibaba, whose core business is inextricably linked to domestic demand, such a trend is particularly challenging. The market's immediate reaction confirmed the stock's sensitivity to broader economic indicators, with shares declining approximately 5.15% over the weekly period.

Should investors sell immediately? Or is it worth buying Alibaba?

Technical Picture Reflects Pressure

Following recent losses, the stock is currently trading at 128.80 euros as it attempts to find a base. A review of technical indicators, however, reveals the depth of the current correction. The price is trading notably below its 50-day moving average of 139.20 euros, a clear confirmation of the short-term downward trend.

Simultaneously, the Relative Strength Index (RSI) reading of 29.4 points to an oversold condition. This scenario could potentially set the stage for a short-term technical rebound, provided further negative macroeconomic news does not emerge.

The critical question for the near-term trajectory is whether current support levels will hold. As long as macroeconomic uncertainty and continued consumer restraint in China dominate the narrative, the potential for significant upward movement remains constrained, despite the stock's strong performance earlier in the year.