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Stanley Chik: Alibaba ADR Rises Sharply; HSI Poised to Reclaim 250MA
Hong Kong equities snapped a two-day decline yesterday (28th) owing to the sharp uptick posted by TENCENT (00700.HK), said Stanley Chik, a research head at Bright Smart. The HSI wrapped the session up with a 216-pt rise. The index once returned to its 250MA (19,829) over yesterday’s session but was ultimately unable to defend such a level, which signaled considerable resistance at the level.

However, Chik contended that the HSI may mount another challenge today (29th) to reclaim its 250MA, as BABA-SW (09988.HK)’s ADR leapfrogged 14% after the group’s chairman and CEO Daniel Zhang announced a corporate restructuring plan under which six key business groups will be formed, thus paving way for potential independent fund-raising and listings in the future.

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Stimulated by the news, Chik anticipated that Hong Kong stocks could elevate notably at market open today. If the HSI manages to reclaim its 250MA, the short-term trajectory of Hong Kong equities may hail an inflection point, Chik concluded.

(The author is the licensee of SFC, who holds shares of TENCENT).
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