Some investors have been cautious about investing in China’s tech stocks. However, recent comments from the party secretary of the People’s Bank of China that the tech sector’s heavy clampdown is coming to an end have given investors some confidence to move back into tech shares. This has led to Alibaba shares taking out the 100 EMA level on the weekly chart and they could potentially move even higher in line with China reversing many of its hard Covid lockdown rules.
Alibaba’s seasonals are noteworthy too. Over the last 10 years, between January 11 and June 1, Alibaba has risen 7 times for a whopping average return of 44.64%. The largest gain was an outsized 720% surge and the biggest loss was a substantial 43.10% in 2022.
Major Trade Risks: The major trade risk here is that global stocks see another leg lower on concerns over slowing global demand. Also, note the large moves in Alibaba mean the chances for outsized gains and losses are amplified. Manage risk accordingly.
HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.