Alibaba (9988.hk): New High with Less Convincing Technical Indicators
George Lam October 22, 2020 10:12 AM
Alibaba Group (9988.hk) has reached a new high on Wednesday, however some technical indicators are less convincing...
China Securities Regulatory Commission has approved Alibaba Group's (9988.hk) Ant Group IPO in Shanghai, as the company seeks to raise 35 billion dollars in a dual listing in China and Hong Kong.
On the other hand, Fitch Ratings has affirmed Alibaba Group's "A+" credit rating, outlook "Stable". The rating agency said "the affirmation underscores Alibaba's very strong business profile, large economies of scale, strengths in digital economy, increased revenue diversity, continued robust profitability, high free cash flow generation and conservative capital structure".
From a technical point of view, Alibaba Group (9988.hk) remains trading within a bullish channel drawn from May as shown on the daily chart. However, it has reached a new high on Wednesday with a less convincing candlestick again, while the relative strength index continues to show bearish divergence. Therefore, investors might have to remain cautious as consolidation might be due before the next rally. The level at $280 might be considered as the nearest support, while the 1st and 2nd resistance are expected to be located at $305 and $326 respectively.
Source: Gain Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.