May 12, 2023

E-commerce giant Alibaba will release earnings next week, with investors looking for a broader boost for the Chinese stock market.

BABA – Weekly Chart

BABA – Weekly Chart

The price of BABA trades near the March lows of $80.15, and with two weeks of support, it could move higher toward the $100 level.

Foreign investment support for Chinese stocks waned in April as US-China tensions and a slower recovery hit investment appetite. Investors will be hoping that the retail stores can give the country’s stock index a shot in the arm. Inc. starts the reporting season on Thursday. Analysts expect 1% revenue growth for the first quarter, which would be its slowest pace ever. Alibaba Group Holding Ltd. Is expected to post a less than 3% sales increase. According to Bloomberg, bearish investors have been buying options ahead of the earnings. Since October, the put-to-call ratio for Alibaba’s Hong Kong shares has risen to its highest level.

That could allow contrarian traders to get involved in an upside surprise. The stock is seeing some support on the weekly chart.

Market Overview On Chinese Tech Stocks

Tech stocks in China have struggled since their January peak as China’s consumption-led rebound turned out to be slower than expected. The market had “potentially gotten ahead of itself earlier in the year,” said Robert Lea at Bloomberg Intelligence. “Internet stocks rallied in anticipation of better times to come, with hopes pinned on the potential upside from reopening and a more benign regulatory environment. However, this did not lead to a change in the earnings outlook for most companies.”

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