- Alibaba stock lost 1.8% to close at $93.71 on Thursday.
- BABA shares sold off at the open on Friday but steadily gain steam.
- SEC and Chinese regulators have become optimistic over listing issue.
Alibaba (BABA) stock has begun to reclaim ground in Friday's late morning trade. In the first hour, BABA sold off more than 3.1% but is now trading at the time of writing down 0.6% at $93.18. Shares of the e-commerce leader in China lost 1.8% to close at $93.71 on Thursday. This was much better than some of its peers as Chinese stocks have been discounted since the government announced a covid lockdown in the major industrial city of Chengdu.
Alibaba stock news
Alibaba has its operations dispersed all over China, so it may be less affected by a lockdown than some other companies. Additionally, e-commerce sales have generally spiked during lockdown scenarios in the past.
This latest weakness in BABA shares is unusual since two long overhanging issues have become more or less resolved in the past month. First, SoftBank said it would sell half of its stake in Alibaba to shore up capital after losing badly in this year's tech sell-off. That news on August 11 led the stock to gain as investors put this expected piece of news behind them.
Second, worries over a possible delisting of its US shares has also just been brushed aside. The SEC's Public Company Accounting Oversight Board (PCAOB) has been scheduled to review Alibaba's internal audits beginning in mid-September. Without being given access to these public company audits, the SEC said earlier in the summer that it would have to remove hundreds of Chinese stocks from US exchanges. Now that this weight has been lifted through a preliminary deal with Chinese regulators, the markets have expected BABA shares to begin a reversal back toward $300 when its regulatory issues began.
The PCAOB has sole discretion to select firms at will for audit reviews and issue fines without input from Chinese authorities, which is a first in the nations' relationship.
Alibaba stock forecast
BABA stock still faces most of the same support and resistance levels. The 9-day moving average has recently overtaken the 21-day moving average, so despite the recent sell-off, it seems a particular segment of investors remains enthused.
A bullish target for Alibaba share price is the August 26 range high at $104.85. If that can be taken out, then the year-long $109.76 level is the next in line. After that, the $120 level that has long provided serious resistance stands in the way. On the downside, $82 and $78 remain two sites available for support. Slight support can also be found for around $88.
BABA daily chart
The author owns shares of BABA.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD flirts with 1.0700 post-US PMIs
EUR/USD maintains its daily gains and climbs to fresh highs near the 1.0700 mark against the backdrop of the resumption of the selling pressure in the Greenback, in the wake of weaker-than-expected flash US PMIs for the month of April.
GBP/USD surpasses 1.2400 on further Dollar selling
Persistent bearish tone in the US Dollar lends support to the broad risk complex and bolsters the recovery in GBP/USD, which manages well to rise to fresh highs north of 1.2400 the figure post-US PMIs.
Gold trims losses on disappointing US PMIs
Gold (XAU/USD) reclaims part of the ground lost and pares initial losses on the back of further weakness in the Greenback following disheartening US PMIs prints.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.