Recent moves by China’s central bank continue to pay dividends for stocks like JD.com (JD) and Alibaba (BABA).
JD.com stock continued their recent rocket shot of a rally with today’s 7.3% gains.
The stock now trades almost 60% higher than it did just 10 days ago ahead of the central bank’s stimulus.
JD.com shares have traded in a long-term bear market trend since moving below their 20-month moving average in February 2022. That changed in the end of August as the stock surged above the same long-term trendline at $30.
From a short-term perspective, JD.com shares are technically overbought according to their RSI. This indicator suggests that the stock is likely to see a healthy pullback before continuing its trend higher.
Investors looking for an opportunity to buy the stock at slightly lower prices may consider being patient as the stock is likely to pull back to $37.50 or lower. That move would be initiated by short-term traders selling to take profits from the stock’s sudden move higher.
While the stock is in a technical bull market, investors should remain cautious of JD.com shares over the next few months as China’s economy continues to show signs of contraction.
Three Stocks
Advanced Micro Devices (AMD) and other semiconductor stocks saw accelerated selling today as the S&P Semiconductor ETF (XSD) dropped 3.5%.
Much of the day’s volatility came from the increase in geopolitical tensions in the Middle East. That said, the selling puts shares of Advanced Micro Devices in a technically tough spot.
Shares of AMD have struggled to move above their 200-day moving average. That trendline is often referred to as a gauge of a stock’s long-term momentum.
Today’s selling dropped AMD shares back below their 200-day moving average after spending just four days above the critical measure.
Furthermore, AMD’s 50-day moving average crossed below the stock’s 200-day trendline in mid-August. That pattern, referred to as a “Death Cross” forecasts weaker momentum for a stock over the following 4-6 weeks.
Shares of AMD are now faced with a critical test of their 50-day moving average, currently priced at $147. A break below that trendline will target another move lower to the stock’s recent lows near $130.
Shares of AMD remain in a long-term bull market trend, though they continue to lag most semiconductor stocks.
Shares of insurance company Humana (HUM) dropped more than 12% on Tuesday in reaction to the company’s release of their 2025 Medicare Advantage offerings.
Investors reacted to the new offerings as they are likely to cut into Humana’s profit margins. Over the last five years, Humana has shifted their business focus from private sector insurance to Medicare plan offerings.
Currently, Medicare business accounts for around 65% of Humana’s total earnings.
The selloff dropped Humana stock to its lowest price in more than two years.
Shares cracked through the $300 level to close the day’s trading at $279.45.
In early September, Humana’s 50-day moving average shifted into a bearish trend. Since then, the stock has shed almost 20% of its value.
Expanding the chart to look at the stock’s long-term outlook, Humana shares slipped into a bearish pattern in December 2023 as the stock moved below its 20-month moving averages.
With today’s move below $300, the stock will draw additional selling as institutions and long-term investors begin to add to the selling pressure.
Humana stock maintains a bearish outlook with a price target of $215.
