Alibaba & Tencent: The Latest Twists and Turns

Alibaba's (9988) and Tencent's (700) share prices have rebounded after suffering heavy losses last week, however their technical outlook has not confirmed upturns.

Trading floor 1

Alibaba (9988): No Upturn Signal Yet

Chinese tech giant Alibaba's (9988) share price plunged 10.7% last week, amid concerns over antitrust scrutiny. The company announced on Monday that its board has authorized to upsize the company's share repurchase program from US$6 billion to US$10 billion through the end of 2022. Its share price has rebounded by more than 7% from Monday's low of HK$207.20.

Source: GAIN Capital, TradingView

However on a daily chart, Alibaba (9988) has not yet confirmed an upturn despite the most recent rebound. It has stabilized after approaching the 161.8% Fibonacci extension level, however the relative strength index has not shown bullish divergence and its upside potential could be limited by the bottom of its previous trading range. The level at HK$246.00 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at HK$207.20 and HK$180.60 respectively.

Tecent (700): Downside Pressure Intensifies

Source: GAIN Capital, TradingView

Similarly, Tecent (700) has lost 4.1% in the prior week, the largest decline since September, as investors were worried that there might be more antitrust investigations into tech giants by Chinese regulator. 

On a daily chart, Tecent (700) remains under pressure after breaking below a rising trend line drawn from March. In fact, it has formed a runaway gap on Monday, suggesting strong bear moves. The level at HK$563 may be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at HK$500 and HK$467 respectively.

More from Tech Stocks

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account