Alibaba Stock Forecast: Ma Arrest Rumour Fuelling Downside Potential

The Alibaba stock forecast indicates the potential for a lower open on Tuesday after the stock dipped in Asia trading. Several US and Hong Kong-listed tech giants had a mixed grill of trading in the Hong Kong session, with Alibaba on the losing side after rumours of the arrest of founder Jack Ma hit the airwaves. The Alibaba share price lost 1.86% by the time trading was concluded on the Hang Seng index.

A Bloomberg report quoted Chinese state TV saying that the Chinese authorities had placed an individual under the surname “Ma” under “compulsory curbs” in Hangzhou. Hangzhou happens to be the home base of Alibaba founder Jack Ma. The report says that the reasons provided by the authorities under the curbs were inciting subversion of the state and engaging in activities that jeopardised national security. 

If confirmed, this would be the latest in a series of troubles the embattled Ma has had with his home government. In late 2020, he disappeared from the public view after a speech criticising Beijing’s approach to regulation angered authorities. A regulatory crackdown on tech companies followed, decimating the market capitalisation of several companies in which Jack Ma has interests. 

The Alibaba share price is also coming off an extended selloff that caused it to plummet from $180 in October 2021 to less than half of that price in mid-March 2022. A brief recovery followed before more selling followed in April 2020. So what is the Alibaba stock forecast in the light of the latest developments?

Alibaba Stock Forecast

A lower open to the day breaches the 98.63 support level, but the bears would be seeking a breakdown confirmation before the path towards 82.57 (25 April low) can be considered to be precise. Additional support sits at 73.22, the site of the low seen on 15 March 2022. The downtrend would be re-established if the price action drops below this low, targeting the 60.03 psychological support and a previous low of 8 February 2016. 

On the other hand, a close above the 101.21 price mark preserves that level as a support. This also provides the opportunity for a push towards the 109.97 price level (28 January lows and 18 March highs). Additional barriers to the north exist at 120.27 (30 March 2022 high) and at 129.88 (7 December 2021 and 17 February highs). Clearance of these levels is required before the 138.50 resistance (12 January 2022 high) and 148.55 (18 November 2021 high) become valid northbound targets. 

BABA: Daily Chart