Alibaba Group Holdings, Inc BABA, Baidu, Inc BIDU and Nio, Inc NIO all gapped up higher to start Monday’s trading session after news that China’s banking and insurance regulator recommended lenders provide credit to developers in order to help them finish housing projects that have been delayed.
China has recently begun to relax some of the harsh restrictions placed on a number of its home-based companies in order to boost its economy.
The surge in a number of Chinese stocks was hampered intraday due to volatility in the general markets, which saw the S&P 500 gap up to start the trading day before rejecting at the $3,900 level and closing the trading day down about 0.84%.
Alibaba and Baidu weren’t helped by the daily candles the stocks printed on Monday, which likely indicates lower prices are on the horizon and a downtrend may occur. Nio has been trading in a downtrend since June 27 and the price action on Monday likely confirms the trend is still intact.
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The Alibaba Chart: Alibaba negated its uptrend on July 11, when the stock printed a lower low below the $111.38 mark. Alibaba’s rise to the $106.96 mark on Monday likely confirmed that the stock is now trading in a downtrend because the stock printed a bearish Marubozu candlestick, which indicates lower prices are likely to come on Tuesday.
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