Alibaba Hits New High as Ant IPO Approaches
One of the more interesting dynamics since the Nasdaq-100 swooned last month has been the relative strength of Chinese technology stocks like Alibaba.
This hourly chart compares the HXC with the
NDQ
. First you have the simple outperformance since the low. Second, notice that HXC made a higher low in late September, while NDX made a lower low. That can indicate Chinese names faced less selling pressure than U.S. megacaps.
Alibaba is an important Chinese company. As expected, it probed key support in late September before bouncing. Today it inched to a new all-time high. In contrast, none of the big domestic stocks have returned to old highs since last month’s pullback. For example, TradeStation’s analytics show that the only NDX members to hit new highs in the last week are less prominent firms like
CPRT
, NASDAQ:SGEN and
CHTR
.
There are a couple of reasons. One is Ant Group’s initial public offering later this month: The world’s biggest fintech, doing the largest IPO ever – but outside the U.S.! BABA owns one-third of Ant, so could be the main way for Americans to play it.
Another reason is China versus the U.S. The Asian country has not only recovered from coronavirus more quickly. It may have less political risk (at least in the near term) than the U.S. Just yesterday, the House of Representatives recommended significant antitrust measures against Apple,
AMZN
, Alphabet and Facebook. While these could prove “more bark than bite” in the long-term, they create uncertainty in the near-term. Maybe that’s why all four of those stocks remain below their 50-day simple moving averages (SMAs) today.
Meanwhile, China’s settling into a post-pandemic recovery and seems determined to support its financial markets.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
This hourly chart compares the HXC with the
NDQ
. First you have the simple outperformance since the low. Second, notice that HXC made a higher low in late September, while NDX made a lower low. That can indicate Chinese names faced less selling pressure than U.S. megacaps.
Alibaba is an important Chinese company. As expected, it probed key support in late September before bouncing. Today it inched to a new all-time high. In contrast, none of the big domestic stocks have returned to old highs since last month’s pullback. For example, TradeStation’s analytics show that the only NDX members to hit new highs in the last week are less prominent firms like
CPRT
, NASDAQ:SGEN and
CHTR
. There are a couple of reasons. One is Ant Group’s initial public offering later this month: The world’s biggest fintech, doing the largest IPO ever – but outside the U.S.! BABA owns one-third of Ant, so could be the main way for Americans to play it.
Another reason is China versus the U.S. The Asian country has not only recovered from coronavirus more quickly. It may have less political risk (at least in the near term) than the U.S. Just yesterday, the House of Representatives recommended significant antitrust measures against Apple,
AMZN
, Alphabet and Facebook. While these could prove “more bark than bite” in the long-term, they create uncertainty in the near-term. Maybe that’s why all four of those stocks remain below their 50-day simple moving averages (SMAs) today. Meanwhile, China’s settling into a post-pandemic recovery and seems determined to support its financial markets.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
