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1 Stock To Buy, 1 To Dump When Markets Open: Adobe, Alibaba

By Investing.com (Jesse Cohen/Investing.com)Stock MarketsSep 19, 2021 07:41AM ET
www.investing.com/analysis/1-stock-to-buy-1-to-dump-when-markets-open-adobe-alibaba-200602360
1 Stock To Buy, 1 To Dump When Markets Open: Adobe, Alibaba
By Investing.com (Jesse Cohen/Investing.com)   |  Sep 19, 2021 07:41AM ET
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Stocks on Wall Street closed lower on Friday, with the benchmark S&P 500 index declining for the second week in a row as investors await the Federal Reserve's timeline for tapering asset purchases.

S&P 500 Daily Chart
S&P 500 Daily Chart

The week ahead will be filled with important economic data, e.g., the U.S. central bank’s key monetary policy meeting, as well as another batch of notable earnings from companies like Nike (NYSE:NKE), FedEx (NYSE:FDX), and Costco (NASDAQ:COST), making it a busy one.

Regardless of which direction the market goes, below we highlight one stock likely to be in demand in the coming days and another which could see fresh losses. 

Remember though, our timeframe is just for the week ahead.

Stock To Buy: Adobe Systems

Adobe Systems (NASDAQ:ADBE) will be in focus this week, as investors await the latest financial results from the high-flying software giant, which is slated to release fiscal third-quarter earnings after the bell on Tuesday, Sept. 21.

The tech titan has beaten Wall Street’s profit and sales estimates in nine out of the last 10 quarters, dating back to Q4 2018, thanks to booming demand for its wide array of subscription-based digital media and marketing software tools.

Consensus expectations call for earnings per share (EPS) of $3.01, improving roughly 18% from EPS of $2.57 in the year-ago period. Revenue, meanwhile, is forecast to rise around 21% year-over-year to $3.9 billion, reflecting strong growth across its key business segments.

Beyond the top- and bottom-line numbers, investors will pay close attention to Adobe’s outlook for the current quarter and beyond as the existing operating environment has created a perfect backdrop for the cloud-based tech company to thrive.

Adobe Daily Chart
Adobe Daily Chart

Shares of the San Jose, California-based software-as-a-service powerhouse—which tacked on 52% in 2020 thanks to a growing wave in enterprise digitization spending during the COVID pandemic—have gained an additional 31% in 2021.

ADBE—which reached an all-time peak of $673.88 on Sept. 3 before pulling back—ended Friday’s session at $654.48, earning the software leader a valuation of $311.8 billion.

Stock To Dump: Alibaba Group Holdings

Shares of Alibaba Group Holdings (NYSE:BABA) are expected to suffer yet another challenging week amid worries over the negative impact of ongoing scrutiny by Chinese authorities to crack down on the country’s other tech behemoths. Alibaba is the country's major online e-commerce player, often referred to as the 'Amazon of China.' 

The latest negative news came after China's top securities regulator defended Beijing’s ongoing clampdown on the country’s tech sector in a private meeting with Wall Street executives. China Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai said during the meeting, which took place last Thursday, that the crackdown was aimed at strengthening regulations for companies with consumer-facing platforms and improving data privacy.

The three-hour gathering included the head of the People's Bank of China, and executives from Goldman Sachs, Citadel, and other Wall Street firms. Taking this into consideration, BABA shares look set to remain on the defensive this week as it continues to face uncertain regulatory challenges ahead.

Alibaba Daily Chart
Alibaba Daily Chart

BABA stock—which has fallen 31% year-to-date—closed at $160.05 on Friday, not far from a recent two-year low of $152.80 touched on Aug. 23. Shares now stand roughly 50% below their record high of $319.32 hit in October 2020.

At current levels, the Hangzhou, China-based tech behemoth has a market cap of $433.9 billion.

1 Stock To Buy, 1 To Dump When Markets Open: Adobe, Alibaba
 

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1 Stock To Buy, 1 To Dump When Markets Open: Adobe, Alibaba

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Comments (26)
Shahbaz Ameer
Shahbaz Ameer Sep 22, 2021 8:32PM ET
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If you want to make money do the opposite of what this guy says, ngl always works for me
Chris Sundo
Chris Sundo Sep 21, 2021 9:58PM ET
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BABA 178 looks logical: we've been hitting the same declining bottoms line for the 3rd time now; the last 2 times one distinct month apart. --- After BABA hit that line a month ago it managed to close above it's declining 20dma for 1 day on Sep 7th, some kind of omen perhaps. --- Nearby its recent peak on Sep 2nd around 178 there was a prior Low on July 27, and that area is being approached RIGHT NOW by its 50dma over the next few days, a very nice CONFLUENCE. -- So, I wouldn't be surprised if BABA keeners up to that 180, especially now that a 'bearish W' has formed, telling me that the gap between 183 and 178 will more likely remain open, after becoming tested thoroughly.
Autos Sansu Experience
Autos Sansu Experience Sep 20, 2021 8:13PM ET
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I see Adobe a great company but price too high to enter now IMO. Baba at $150 is like Christmas times.
Radium King
Radium King Sep 20, 2021 8:01PM ET
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Foolish article.
علی جٹ
علی جٹ Sep 20, 2021 10:40AM ET
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hi ho ar you wath is your name
Mary Lisa
Mary Lisa Sep 20, 2021 10:40AM ET
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ola
Mary Lisa
Mary Lisa Sep 20, 2021 10:40AM ET
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okay
João Guilherme
João Guilherme Sep 20, 2021 5:43AM ET
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so basically sell what is extremely undervalued?
Chris Sundo
Chris Sundo Sep 20, 2021 5:43AM ET
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Good question. Not likely selling BABA on my side ;) I've been averaging down, one share at a time. Got in with 2 shares and have been averaging down ever since, and then been selling into the declining averages at a gain. Just got stuck recently, now with a small under water, but will continue to average down. Sooner or later this is gonna roar out of the gate, likely with bigger swings the closer we get to the bottom.
simone scelsa
simone scelsa Sep 20, 2021 5:43AM ET
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buy high sell low all they way...to bankruptcy
DC Ze
DC Ze Sep 20, 2021 12:31AM ET
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I wonder about the track record of the author who wrote this Investing.com always asks its readers to Buy High and Sell Low Consider asking readers to Buy Low and Sell High for a change
Meru Pet
Meru Pet Sep 20, 2021 12:31AM ET
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if you say "buy high, sell low", you claim that you know what is high and what is low. It can go higher, it can go lower...
simone scelsa
simone scelsa Sep 20, 2021 12:31AM ET
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Meru Pet  buy value, sell expensive. Sell crowded trades, buy non crowded trades.
RF RF
RF RF Sep 19, 2021 8:09PM ET
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Great time to get into baba or get more. Look at those financials! Bad advise to sell now Mr Cohen.
John Lakran
John Lakran Sep 19, 2021 8:09PM ET
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Not a single piece of actual financial reasoning here to sell baba only an assumption of continued selling pressure. I stress this is a bad idea you can never predict when it will turn. Trust the financials not the market as the market is often wrong
Phil Manuel
Phil Manuel Sep 19, 2021 6:51PM ET
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just like last week the opposite will happen
Paul IllTradeThese
Paul IllTradeThese Sep 19, 2021 6:15PM ET
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yah it will keep going down. but its fundamentals are sound. i buy baba every month same amount every month. dont catch a falling knife? catch it over and over in my opinion. its market cap will hit 1 trillion in 5 years. 100% gain in 5 years. thank you
Pedro Emilio Silva Conde
Pedro Emilio Silva Conde Sep 19, 2021 6:15PM ET
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Less than 5
Dmitry same
Dmitry same Sep 19, 2021 6:15PM ET
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I'd rather buy it for 130 then 190180170160150
Chris Sundo
Chris Sundo Sep 19, 2021 6:15PM ET
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Dmitry same  -- or a 100 for better measure. Round Roaring Number
Andrew Kosasih
Andrew Kosasih Sep 19, 2021 3:37PM ET
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baba 80 I will put my whole investment with them
Meru Pet
Meru Pet Sep 19, 2021 3:19PM ET
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for BABA, i tend to agree, but your opinion will be impopular
JC CC
JC CC Sep 19, 2021 2:39PM ET
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they are wrong about BABA! no more cheaper shares and had enough of bad news all year long, all passed. Saw lots of calls buying at 180, 200 on Friday! Definite bounce coming $$$$$
Meru Pet
Meru Pet Sep 19, 2021 2:39PM ET
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why this timing ?
Dmitry same
Dmitry same Sep 19, 2021 2:39PM ET
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because he needs it to go up now
Jürgen Freese
Jürgen Freese Sep 19, 2021 1:54PM ET
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People are sleeping...  Look at Rocket Lab  $RKLB 10x in the next year mark my words.
Chris Sundo
Chris Sundo Sep 19, 2021 1:54PM ET
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-- Juergen: RKLB going like GREE right now.
Axel Hippocrate
Axel Hippocrate Sep 19, 2021 1:47PM ET
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so many offended bears lmao but lets be clear if it breaks below 150 next week its sayonara and everybody knows it lol
Axel Hippocrate
Axel Hippocrate Sep 19, 2021 1:47PM ET
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bulls I meant
Joey Morace
Joey Morace Sep 19, 2021 1:47PM ET
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but why?
Jason Lebron
Jason Lebron Sep 19, 2021 12:59PM ET
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ADBE is a hold ahead of earnings despite of being a great Long-term play.BABA seems to have bottomed around 155 but F Chinese stocks at the moment. The market is too 🔥 right now to be buying stocks to hold but great for day trades
Chris Sundo
Chris Sundo Sep 19, 2021 12:59PM ET
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Last 'earnings' were Aug 3, so next earnings would be in 2 mos from now.
bill wagner
bill wagner Sep 19, 2021 12:30PM ET
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Baba has officially hit a double bottom. News that came out this weekend shows regulators are backing off on the crackdown. They are letting foreign investors come in to future ipo’s. This is very bullish for the whole tech sector. We will see a nice pop Monday morning. I expect to retest last weeks high’s of $178 in the next day or two. This is the buying opportunity of the year.
Tim Gilbert
TimothyTekno2020 Sep 19, 2021 12:30PM ET
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Further supporting your point, the stock market will move higher again this week, after completing its routine 20-or-so-days swing down, which bottoms every 19-23 days, 20th day down was friday, Triple Witching Day, which was and usually is more volatile than most other days. So the bottom likely last Friday or no later than Wednesday before/after FOMC, another catalyst. BABA, because of its oversold technical conditions from months selling off, bounces more sharply than most stocks on the move higher, similar but more extreme than Russell 2000 index since spring, which like BABA, is showing signs of more constructive technical structure in this past “20 day” (19-23 days) cycle. Same thing for Tencent (TCEHY). Writer is discussing this week. I’m pointing out that looking few to several months away, intermediate term, investors will look back at BABA’s price and be envious of those who bought into this time of fear and capitulation in BABA and Chinese big tech more generally.
Sabi Sab
SabiSab Sep 19, 2021 12:30PM ET
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How do you define a double bottom when it's not even close to making a neckline, let alone breaking out of it?
Sabi Sab
SabiSab Sep 19, 2021 12:30PM ET
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Tim Gilbert The failure of Americans is that you guys all use the American way of capitalism thinking to define Chinese politics.  There's nothing called too big to fail in China unless you are talking about the CCP itself.  BABA is destined to fail once Jack Ma offended Xitler, this company will go obsolete as the poster child of the disobedient and be replaced by another company.  The politics has been like this since 1949 and never changed.  That's why there's always some kind of policies coming out aiming at BABA every other month.  It's been almost a year already with this kind of cycle and you guys still haven't waken up!
Sabi Sab
SabiSab Sep 19, 2021 12:30PM ET
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In fact, the CCP opts to take down companies that have gotten way too large because they are afraid the party's control over Chinese citizens will be overpowered and threaten CCP's existence.
Mihai Razvan
Mihai Razvan Sep 19, 2021 11:50AM ET
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1 stock to buy when the market open Amc&Gme noobs
Ryo Kwan
Ryo Kwan Sep 19, 2021 11:50AM ET
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SQ also.
Tan Boon Chong
bCeye Sep 19, 2021 11:18AM ET
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lunar rally in 3 mths 💰💰... all in but not for the weak hearted
Axel Hippocrate
Axel Hippocrate Sep 19, 2021 11:13AM ET
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Baba is going to 80 by the end of the year.Mark my words
Lorenzo Morosini
Lorenzo Morosini Sep 19, 2021 11:13AM ET
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Baba intrinsic value is around $300 with conservative assumptions. 80 would be a too irrationally discounted price imo. Anything can happen though
Jose Juanmijo
Jose Juanmijo Sep 19, 2021 11:13AM ET
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80 my ******** You know nothing.
Viktor Vilmos Ragán
Viktor Vilmos Ragán Sep 19, 2021 11:13AM ET
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i will buy then
Sani Abba
Sani Abba Sep 19, 2021 11:09AM ET
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sim
Max Manuel
Max Manuel Sep 19, 2021 11:06AM ET
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Okay sounds like Monday will be a great day for me to buy more.
Max Manuel
Max Manuel Sep 19, 2021 11:06AM ET
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And that’s more BABA.
Tim F
Tim F Sep 19, 2021 11:06AM ET
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Better you then me.
Selvakumar Df
Selvakumar Df Sep 19, 2021 11:05AM ET
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Sergej Andropov
Sergej Andropov Sep 19, 2021 11:05AM ET
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Why to sell alibaba. Its ***cheap. Sell the greed buy the fear. Nice try manipulating $BABA
Sabi Sab
SabiSab Sep 19, 2021 11:05AM ET
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The failure of Americans is that you guys all use the American way of capitalism thinking to define Chinese politics.  There's nothing called too big to fail in China unless you are talking about the CCP itself.  BABA is destined to fail once Jack Ma offended Xitler, this company will go obsolete as the poster child of the disobedient and be replaced by another company.  The politics has been like this since 1949 and never changed.  That's why there's always some kind of policies coming out aiming at BABA every other month.  It's been almost a year already with this kind of cycle and you guys still haven't waken up!
Selvakumar Df
Selvakumar Df Sep 19, 2021 11:05AM ET
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50000/=
 
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