Why is Alibaba's Share Price Falling Steeply Today? New Rules Are to Blame

Summary:

Alibaba share price action continues on the steep and slippery slope after the Chinese government released new rules for tech companies.

On Tuesday, the Alibaba share price fell steeply after the Chinese government issued new regulations for internet companies. New draft rules for some of China’s biggest internet companies came into effect on Tuesday, seeking to ban unfair competition and limiting user data flows.

This move is the latest in a series of crackdowns that have targeted some of China’s biggest internet businesses and tech companies. The Alibaba share price is 4.3% lower as of writing.

Alibaba Share Price Outlook

Alibaba shares continued the steep decline on Tuesday and violated the 180.35 support level. A further decline targets 170.83 (18 March 2020 low). Below this level, 163.63 and 155.22 form additional targets to the south.

On the other hand, bulls would be seeking a return above 241.20 for the price reversal. This move would require a turnaround that takes out several resistance barriers, primarily at 190.55, 198.97, 219.65 and 229.34. But with sentiment favouring more selling, a rally to any of these barriers may present fresh selling opportunities for bears.