Alibaba has quickly gone from this month’s top index laggard on the Hang Seng Index to top performer after a 30% rally off its 5 October record low level of HK$135.30 to currently trade at HK$173.90.
 
The stock saw a sharp turnaround in its share price fate the day after food delivery giant Meituan was dealt a lower-than-expected fine by China authorities, which led investors to believe that China is easing its regulatory crackdown on tech firms. Alibaba shares had also surged as much as 9% on Wednesday after reports that Alibaba founder Jack Ma had travelled to Spain, suggesting an improvement in his relationship with China authorities… 

Why is Jack Ma’s appearance in Europe an important signal

Ma’s whereabouts have been the topic of intense discussion since he went out of the public view in October 2020 after a speech in which he appeared to criticize Chinese regulators. 

The initial public offering of Jack Ma’s fintech giant Ant Group was subsequently suspended. Since then, China’s technology sector has also come under intense scrutiny from regulator, which has led to a sell-off in Chinese tech shares and wiped off billions of dollars from the Hong Kong equity market. Notably, Alibaba was down as much as 56% from October 2020, before rebounding 30% off its 5 October 2021 record low in the last 2 weeks.

In other company news this week, Alibaba launched a new chip designed for servers in a bid to boost its cloud computing capabilities. Cloud is seen as a key part of Alibaba’s future growth which currently accounts for 8% of the company’s total revenue.

On Wednesday, Alibaba said that it plans to open new data centers in South Korea and Thailand next year to continue overseas expansion of its cloud business. (CNBC)

Since rebounding 30% off its October record low level of HK$135.30, the stock is currently trading trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, which are typically bullish indicators according to Benzinga Newswire. Alibaba is however, still trading well below the 200-day simple moving average at around HK$207, which indicates overall sentiment is still bearish.