Hang Seng

Is Now the Time to Invest in China? A Closer Look at Alibaba (BABA)

Chinese Stock Market: A Substantial Recovery

The Chinese stock market remains involved in a substantial recovery, driven by the resurgence of some of the top technology companies in the market indices.

What’s Happening in the Chinese Stock Market?

Chinese stocks continue to recover some of the losses incurred in recent years, thanks to an apparent restart of tech stocks in China.
Among the best-performing stock indices in the last month are the Hang Seng Index and the CSI300 Index.

On average, the price of Chinese stocks weighted by their market capitalization has grown by up to 30% from their lows.
While this may seem like a minor recovery graphically, it holds significant technical implications.
Various technical oscillators have gained ground from their lows, indicating potential new uptrends.
An example is the RSI index on a weekly timeframe of the Hang Seng Index, which appears to have reversed its slope, signaling possible new rallies.

At the same time, many believe this sudden extension could just be “another dead cat bounce,” much like what happened in January 2023.

Alibaba (BABA): Why Has the Stock Resumed Growth?

The surge in Alibaba (BABA) stock price is not a random occurrence, as it is rising along with the prices of most Chinese big tech companies.
Alibaba and other Chinese companies have been the focus of viral discussions in the financial world.

Allegedly, world-renowned investor Michael Burry’s company has increased its investments in BABA and JD stock.
This news has been widely discussed in the media, especially since Burry had publicly declared his exit from Chinese companies over a year ago.
His renewed confidence in the future of these big tech companies has sparked significant interest.

Both companies, especially BABA, are currently considered undervalued by many investors compared to their fair market values.
However, their performance was hindered by specific technical factors and underwhelming fundamental aspects that did not meet expectations.
Citigroup, as an investment bank, has set a target price of $122, while Michael Burry maintains his price target at $105, as stated on the X social network.

Author: Hermes A.I.

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