Home Investments Alibaba Group Holding Limited (NYSE:BABA) planning to raise $20 billion from a...

Alibaba Group Holding Limited (NYSE:BABA) planning to raise $20 billion from a secondary stock offering in Hong Kong

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Alibaba Group Holding Limited (NYSE:BABA) planning to raise $20 billion from a secondary stock offering in Hong Kong

Alibaba’s $25 billion debut on the New York Stock Exchange in 2014 was, at the time, the largest-ever initial public offering in the U.S. Now that the company is said to be planning to raise $20 billion from a secondary stock offering in Hong Kong, the operators of America’s top exchanges should be worried that business from China will start to dry up.

Alibaba Group Holding Ltd. isn’t deserting New York, which will remain its primary listing. But its plan to add one in Hong Kong signals to other Chinese companies that they have IPO options closer to home, people familiar with the matter have said.

Businesses without a three-year track record of profitability are still prohibited from listing on Chinese exchanges. But a soon-to-be-launched market in Shanghai will allow money-losing tech plays to be listed, and in April 2018, Hong Kong changed its regulations to allow unprofitable tech companies to list in the city.

It also scrapped a strict one-share-one-vote rule for tech stocks, leading to mega-IPOs by Chinese smartphone operator Xiaomi Corp., which raised $5.4 billion in July, and food-delivery giant Meituan Dianping, which raised $4.2 billion ahead of its debut in September. The issues helped propel Hong Kong to become the world’s top IPO venue last year.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 165.94.

The projected upper bound is: 169.90.

The projected lower bound is: 149.08.

The projected closing price is: 159.49.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 69.2993. This is not an overbought or oversold reading. The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 45.57. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 5.620 at 159.850. Volume was 90% above average (neutral) and Bollinger Bands were 55% wider than normal.

Open High Low Close Volume___
158.270 161.970 157.850 159.850 6,301,096

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 152.89 174.89 163.21
Volatility: 33 38 44
Volume: 5,301,509 3,851,830 4,050,978

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

ALIBABA GRP ADR gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
ALIBABA GRP ADR is currently 2.1% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of BABA.N (mildly bearish). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 21 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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