When the U.S. and China met at the G20 event in Buenos Aires, the two agreed not to raise tariffs. Yet by keeping the tariffs in place but resuming trade again, investors punished China-based stocks. The ongoing uncertainties for the Chinese economy led to Alibaba (NASDAQ:BABA) stock failing to hold the rally to $170 on December 1. Alibaba stock is now down $40 since then. What happens next for it, and Chinese stocks in general?
Alibaba is now at a 52-week low, a level that could attract speculators, eventually. Bearishness for the market and for Chinese stocks in particular is accelerating. iQiyi (NASDAQ:IQ), Baidu (NASDAQ:BIDU), and Momo (NASDAQ:MOMO) are all in a sustained downtrend. Newcomer NIO Inc. (NYSE:NIO) will probably find new lows in the sessions ahead. Investors just do not want to commit to these stocks. And if Alibaba stock cannot find buyers, then investors will not want to hold them for very long.
Look at JD.com stock: it managed to rally ~6% on Friday, Dec. 21 when the S&P 500 (SPY) was down 2% and the DOW was down 1.81%. If Alibaba, and by that extension Altaba (NASDAQ:AABA) are not bucking the trend, investors should treat each rally only as a temporary bounce. Trade the bounce but do not hold the stock for too long.
Tech Insider
