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Some followers are worried about the future of Alibaba and its subsidiaries business with the recent investigation by the Chinese government. Unfortunately, I do not have any insider information to pass on so we have to make do with what we have.
1. Is this drop in share price due to the company's fundamentals ?
NO
2. Is this fall in price temporary ?
I believe so as it will not be in the Chinese government interest to abolish Alibaba and the other tech giants , after all they are strong Chinese brands that affect the daily lives of millions of people. Think of Taobao - how many business owners are affected if somehow this site is asked to shut down? Wouldn't this create more unemployment problems to the Government ? Also, the government is gaining corporate tax as a source of government revenue too from these big giants. If they are gone, who within this short period of time can replace them ?
3. Cross reference this scenario to the world of Global tech firms like Apple, Facebook, Microsoft, etc. They too have been summoned to court recently as well . Read here , here and here
NO government can tolerate any private enterprise to gain too much cloud in their specialised field and create a "perceived threat" to them. The sense of "losing control" over this big tech firms has to be reigned asap and not create problems or obstacles that might affect their political stability. Remember, these are bureaucrats , scholars who had not done businesses so they see things differently and follow a set of rules to comply with. They are the whistle blowers , in some way to ensure that a certain boundary is kept and not being compromised.
For Ali Health, you can see the price has now rested nicely on the bullish trend. I see 2 possibilities ahead - 1) it rebounds from here or 2) it continues to fall further to the support line at 17.30 before rebounding.
So, monitor the price this week and go to 4H or 1H chart to determine any bullish signals. For those long term investors, you can consider investing in tranches. 25% at current price , 25% at the support and so on......
Some followers are worried about the future of Alibaba and its subsidiaries business with the recent investigation by the Chinese government. Unfortunately, I do not have any insider information to pass on so we have to make do with what we have.
1. Is this drop in share price due to the company's fundamentals ?
NO
2. Is this fall in price temporary ?
I believe so as it will not be in the Chinese government interest to abolish Alibaba and the other tech giants , after all they are strong Chinese brands that affect the daily lives of millions of people. Think of Taobao - how many business owners are affected if somehow this site is asked to shut down? Wouldn't this create more unemployment problems to the Government ? Also, the government is gaining corporate tax as a source of government revenue too from these big giants. If they are gone, who within this short period of time can replace them ?
3. Cross reference this scenario to the world of Global tech firms like Apple, Facebook, Microsoft, etc. They too have been summoned to court recently as well . Read here , here and here
NO government can tolerate any private enterprise to gain too much cloud in their specialised field and create a "perceived threat" to them. The sense of "losing control" over this big tech firms has to be reigned asap and not create problems or obstacles that might affect their political stability. Remember, these are bureaucrats , scholars who had not done businesses so they see things differently and follow a set of rules to comply with. They are the whistle blowers , in some way to ensure that a certain boundary is kept and not being compromised.
For Ali Health, you can see the price has now rested nicely on the bullish trend. I see 2 possibilities ahead - 1) it rebounds from here or 2) it continues to fall further to the support line at 17.30 before rebounding.
So, monitor the price this week and go to 4H or 1H chart to determine any bullish signals. For those long term investors, you can consider investing in tranches. 25% at current price , 25% at the support and so on......
Wait for the next bullish signal to go long or accumulate