JD.com, Inc. (JD) shares rose more than 5% during Monday's session after analysts reacted to Friday's better-than-expected first quarter financial results. China's largest retailer reported revenue that rose 20.7% to $20.6 billion and non-GAAP net income of 28 cents per share during the first quarter, beating consensus estimates by $1.35 billion and 19 cents per share, respectively. Management cited COVID-19-related demand for online shopping as a key growth driver, with active customer accounts rising 25% to 387.4 million.
Analysts reacted favorably to the strong financial results and outlook for the next quarter. Benchmark's Fawne Jiang reiterated the firm's Buy rating on JD stock and raised its price target to $66 per share, saying that JD was still in the early stages of several years of above-average industry growth and margin expansion. Barclays' Gregory Zhao maintained the firm's Overweight rating on JD shares and raised its price target to $59, saying the offline to online shift that the pandemic has accelerated could extend beyond the pandemic period.
From a technical standpoint, the stock broke out from trendline resistance to fresh highs. The relative strength index (RSI) moved into overbought territory with a reading of 76.62, but the moving average convergence divergence (MACD) remains in a strong bullish upswing. These indicators suggest that the stock could see some consolidation, but the intermediate-term trend remains sharply bullish.
Traders should watch for some consolidation above trendline support levels over the coming sessions. If the stock breaks down from those levels, traders could see a move back into its previous price channel. If the stock extends its rally, traders could see a move to fresh highs over the coming sessions.
The author holds no position in the stock(s) mentioned except through passively managed index funds.