What to expect from Chinese Tech Giants Alibaba and Tencent?

Alibaba and Tencent will report quarterly results in November, while Reuters reported today that Alibaba's Ant Group could be blacklisted by the Trump administration...

Trader 3

Alibaba Group (9988.hk): Consolidate Before Next Rally

Alibaba Group (9988.hk) is expected to report 2Q results in November (exact date not confirmed yet), with an adjusted EPS median forecast of 1.78 yuan, according to Bloomberg. 

Even though Alibaba's share price has been surging since late September, investors would have to be cautious that Reuters reported today that U.S. State Department proposed to the Trump administration to put Alibaba's Ant Group to a trade blacklist.

From a technical point of view, Alibaba Group remains trading within a bullish channel drawn from May as shown on the daily chart. However, it might have formed a bearish shooting star candlestick on Wednesday, while there are signs of a bearish RSI divergence, suggesting there might be a pull-back in the shorter-term. The level at $271 might be considered as the nearest support, and if this level holds, prices are still likely to test the 1st and 2nd resistance at $305 and $320 respectively.

Source: Gain Capital, TradingView

Tencent (700.hk): Early Signs of an Upside Breakout

Tencent (700.hk) will report 3Q results on November 12 and Bloomberg's survey showed an adjusted EPS median forecast of 3.37 yuan, 32% higher than the prior-year quarter.

On a daily chart, Tencent appears to have gathered more upside momentum as it just broken above a 3-month bullish consolidation range, following a rally in the second quarter. The level at $528 might be considered as the nearest support, while the 1st and 2nd resistance are expected to be located at $584 and $630 respectively.

Source: Gain Capital, TradingView

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