Months of outperformance for the JD share price

One of the best stock market rules regarding the share price of companies in the wake of results is that it is “better to travel than arrive.” This rule especially refers to the JD share price, where we have already been treated to months of outperformance. The best illustration of this is to look at the daily chart of the JD share price since the start of the year. Here it is evident that even accounting for a mild dip for JD shares in the immediate aftermath of the COVID-19 crisis in March, the rebound for JD.com shares from a $32 low has been spectacular.

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JD shares in the China e-commerce space

In the near term it is obvious that the driver for the stock has been JD.com’s position as an e-commerce group, a space which was booming pre-pandemic. But now is pivotal to the economy both in its native China, and the rest of the world. It can also be said that JD.com shares occupy a significant position within the China e-commerce sector, second only to market leader Alibaba, but tellingly, with a more upmarket offering to consumers.

 

JD shares Q3 update

On the face of it, even after the stellar ride for the JD.com share price so far this year we should have been treated to a more robust performance in the aftermath of the latest Q3 results. This is because all the major metrics were of the knock the ball out of the park variety. For instance, revenues were up nearly 30%, and annual active customer accounts up 32%.

This is remarkable growth given the way that the greater the growth in e-commerce, the greater the competition and fragmentation of the market. Indeed, if there was a concern regarding the latest Q3 update for JD.com shares, it was that in order to maintain growth, margins may have to be squeezed.

 

JD.com share price beats analysts expectations

One feature of the stock market is that it can reward companies that excel even when their stock has already risen, if analysts expectations are beaten. In the case of JD.com shares, they were. The company managed to serve up earnings of 50 cents a share versus market estimates of 41 cents a share. This is a pretty big win, and therefore holders of JD.com shares may regard themselves as somewhat unfortunate that there was a retracement for the stock in the wake of the Q3 update.

While the pullback in JD.com shares may have been disappointing, as traders fretted about margins, something which even countered a very strong Singles Day performance on November 11. This in itself underlines how much the Chinese economy has bounced back since the pandemic began at the beginning of the year.

 

How to trade JD shares

Open a live or demo account with ATFX to get started today. Trade shares on leverage, take up a long or short position when trading with CFDs and make potential gains from price movements.

1. Register for an account or log in to your existing account

2. Open MT4 either on your desktop or mobile

3. Search for JD shares in the market watch or symbols window

4. Choose your position size

5. Hit buy or sell, and then confirm the trade

 

JD share price daily chart

In terms of where JD.com shares are now on the daily chart, it can be seen that post April support for the stock has come in towards the 50 day moving average. This currently lies near the $80 level, something which suggests the latest pullback for the JD share price should be limited to that zone before the ongoing rally resumes.

Daily chart showing JD share price daily movements for 2020

 

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