Your top stocks to watch this week are several U.S.-listed China plays: Alibaba (BABA), Huya (HUYA), ZTO Express (ZTO), JD.com (JD) and New Oriental Education & Technology (EDU).
Huya stock and ZTO Express stock are in buy zones right now. New Oriental Education stock and JD.com stock are close to buy points. Alibaba stock is still working toward a breakout, but is clearing a resistance level.
Keep in mind that Chinese economic growth is slowing, in part due to the ongoing China trade war. Renewed China trade war escalation could hit these Chinese-listed companies especially hard.
Shares of the e-commerce giant are 6.8% below a 195.82 buy point from a cup-type base. Alibaba stock is clearing resistance near 180.
Alibaba stock has a Composite Rating of 96 and an EPS Rating of 99, indicating the strongest-possible profit acceleration. However, the relative strength line of Alibaba stock dipped in May and has struggled to rebound since. The relative strength line, the blue line in the charts below, tracks a stock’s ability to outperform the S&P 500.
Last month, shares jumped after Alibaba earnings beat fiscal first-quarter expectations. Along with online shopping, Alibaba has put its investments elsewhere — in delivery. Alibaba also recently joined forces with Starbucks (SBUX) to offer voice ordering and delivery service to customers in China.
JD.com, Alibaba’s e-commerce archrival in China, is setting up in a consolidation with a 32.48 entry. Shares are 4.7% below that pivot. JD.com stock has been trading tightly in recent days, finding support at its 50-day line.
Shares have a Composite Rating of 91. JD.com stock’s EPS Rating is 99. However, the relative strength line has flatlined most of this year, after drifting lower last year.
Huya, a streaming platform for gaming, remains in buy range as it holds above a 26.48 buy point from a double-bottom base. The stock has a 95 Composite Rating, but its EPS Rating is weaker at 72, and the stock’s relative strength line has been choppy.
Huya stock has trended higher since the company reported second-quarter earnings last month. Earnings per share and revenue beat expectations.
Average monthly active users jumped 57.3%, “driven by enhanced partnership with several leading game studios and increased integration in the esports value chain,” CEO Rongjie Dong said in a statement. Its focus on mobile gaming also helped.
Huya is an IBD Leaderboard stock.
New Oriental Education Stock
New Oriental Education stock, a recent IBD Stock of the Day, is 3.9% below a 115.98 buy point from an ascending base. The Composite Rating of the educational-services provider is a best-possible 99. Its EPS Rating is also a strong 90. A look at its relative strength line shows it has outperformed the market for much of this year.
New Oriental Education stock got a lift in July after the company reported earnings. Revenue jumped 20%, boosted by its K-12 after-school tutoring business, which it said was a key propellant of growth. The company has also added learning centers in China’s cities.
ZTO Express Stock
ZTO Express is within buy range of a long cup-with-handle base with a 21.46 buy point. As with New Oriental Education stock, shares of the delivery company, sometimes called the FedEx (FDX) of China, carry a 99 Composite Rating and a 90 EPS Rating. Its relative strength has also bounded higher this year.
Similar to other stocks to watch this week, ZTO got a bump after its positive Q2 earnings, reported last month. The company’s delivery network covers much of China’s cities and counties. E-commerce has been a big growth driver. Alibaba is one of ZTO’s backers.