The Didi stock price is set to continue its downward trend when the market opens in the United States. The stock sank by more than 2.5% on Monday and is trading slightly above its all-time low. This brings its total market capitalization to just $39 billion, which is substantially lower than its all-time high of more than $70 billion.
Didi and other Chinese stocks pressured
The DiDi stock price is set to follow other Chinese shares lower. Earlier today, Chinese stocks like Meituan, Alibaba, and Tencent crashed by more than 3% as investors reacted to a new set of policies by Chinese regulators.
The Chinese and American regulatory sectors are further apart. In the US, it is relatively difficult to target a sector. This was the main reason why Donald Trump struggled to revenge on technology and media companies that he viewed as the opposition. This is because many regulatory announcements must be passed through Congress. At the same time, companies can sue the government and its regulators.
In China, regulators have the free hand to come up and implement any policies. And companies must obey the orders from Beijing. In a statement today, a Chinese regulator came up with new policies aimed at reigning on technology companies like DiDi and Alibaba. Therefore, there is a possibility that the DiDi stock price will retreat today.
So, what next for the Softbank-banked company? A few weeks ago, it was reported that the company was working with banks to go private. If this happens, it will be a major humbling of the biggest ride hailing company in China.
Still, while DiDi shares are still cheaper than its peers, they are significantly volatile. For one, recently, authorities announced a new five-year plan to boost regulations. Therefore, the firm will likely be affected. Also, it is not clear the firm will go private.
DiDi stock price forecast
The hourly chart shows that the DiDi stock price has declined by more than 54% from its all-time high. As a result, the shares remains below the 25-day and 50-day moving averages, which is a bearish thing.
Also, the stock is targeting an all-time low of $7.9. A drop below that support will see the coin decline to about $7, which is about 15% below the current level. However, in the longer term, if the company remains public, we can’t rule out a situation where it roars back.