Market News & Analysis
Alibaba Group (9988.HK): Potential Downturn Signals
George Lam May 22, 2020 10:44 AM
On Wednesday, the U.S. Senate passed a legislation that require companies to certify that they are not under the control of a foreign government and would be banned from the U.S. exchanges if they fail to do so. Yesterday, House Speaker Nancy Pelosi said the House will review the bill. Alibaba Group (9988.HK), a Chinese tech giant dual-listed on NYSE and HKEX, would be vulnerable to such legislation.
To make things worse, the Hong Kong Hang Seng Index is down by more than 3% during early Asian trading hours today, amid hostile political environment in the city. Chinese Premier Li Keqiang said China "will establish sound legal systems and enforcement mechanisms for safeguarding national security in the two special administrative regions (Hong Kong and Macau)", a move that has been seen as curtailing protests and democratic movements in Hong Kong. Earlier, U.S. President Donald Trump warned that he "will address that issue very strongly".
From a technical point of view, Alibaba Group (9988.HK) has shown potential downturn signals on the daily chart. It has possibly formed a double-top pattern, while a bearish evening star candlestick was seen on Wednesday. In addition, it has quickly returned to levels below a declining trend line, probably suggesting a false breakout. The level at $212.0 might be considered as the nearest resistance, with prices likely to test the 1st and 2nd support at $187.0 and $178.0 respectively. Alternatively, a break above $212.0 would open a path to the next resistance at $219.0.
Source: TradingView, Gain Capital
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.