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

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.