Alibaba Group Holding Ltd (BABA)

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China-Based Tech Stocks Jump on Positive Sentiment
By: Schaeffer's Investment Research | July 12, 2023

• China-based BABA and JD are moving higher with the rest of the tech sector

• Investors are hopeful that China's tech crackdown is finally over

Several China-based tech stocks are moving higher today, on hopes that the country is easing its three-year crackdown on the sector. Chinese Premier Li Qiang said that local governments need to make regulation more transparent, predictable, and less costly. This comes one week after regulators handed a $1 billion fine to Ant Group, which is partially owned by Alibaba Group Holding Ltd (NASDAQ:BABA).

BABA is up 2.2% at $93.79 at last glance, earlier trading as high as $94.24 and now up 6.6% year-to-date. The stock is breaking above pressure at its 320-day moving average, a trendline it hasn't closed above since April. In the options pits, the 157,000 calls exchanged so far is double the volume typically seen at this point, with the weekly 7/14 95-strike call seeing the most activity.

JD.com Inc (NASDAQ:JD) stock is up 4.1% at $37.50 at last check, eyeing its seventh daily gain in the last eight sessions. Jumping above pressure at its 20- and 80-day moving averages, JD is still down 33.3% since the start of 2023.

It's worth noting that JD.com stock is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 43%, which ranks in the low 7th percentile of its annual range. This means options traders are pricing in low volatility expectations.

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