Chinese electric vehicle manufacturer Li Auto (LI) has been swinging higher recently, gaining nearly 23% of equity value in the past five sessions. However, such robust moves over a one-week period are rare, representing about 5% of the collective price action of LI stock. Further, historical trends don’t necessarily bode well for bullish investors, warranting caution — or even a bearish approach.
To be sure, having a negative outlook goes against the current prevailing trend. One of the key catalysts of the incredible move in LI stock could be tied indirectly to compatriot Alibaba (BABA). Recently, the tech juggernaut released quarterly results that demonstrated its core businesses are thriving. In particular, Alibaba’s premium consumer segment called 88VIP continues to grow, reaching 49 million members.
