Alibaba Group Holding Limited (NYSE:BABA) proposed a one-to-eight stock split ahead of a listing in Hong Kong

Alibaba Group Holding Limited (NYSE:BABA) proposed a one-to-eight stock split ahead of a listing in Hong Kong

Alibaba Group Holding Limited (NYSE:BABA) proposed a one-to-eight stock split ahead of a listing in Hong Kong

China’s Alibaba Group Holding has proposed a one-to-eight stock split ahead of a listing in Hong Kong later this year that is expected to raise up to US$20 billion.

The split, to be presented to shareholders for a vote at an annual general meeting in Hong Kong on July 15, will increase flexibility in the firm’s capital raising activities, including the issuance of new shares, the e-commerce giant said.

The firm’s board recommends shareholders to vote in favor of the proposal, it added in its statement dated Friday but published on the company’s website on Monday.

“The … subdivision will increase the number of shares available for issuance at a lower per share price,” it added.

Alibaba has filed confidentially for a Hong Kong listing, a person familiar with the matter told Reuters earlier this month.

Alibaba has also proposed to change the ratio of ordinary shares to American Depositary Shares (ADS) to eight ordinary shares representing one ADS to neutralize the impact of share split on its ADS listed in the U.S. market.

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 167.94.

The projected lower bound is: 147.45.

The projected closing price is: 157.70.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 6 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 49.4969. This is not an overbought or oversold reading. The last signal was a sell 2 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 43.72. 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 8 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 51. This is not a topping or bottoming area. The last signal was a sell 0 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 6 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -2.230 at 158.100. Volume was 5% above average (neutral) and Bollinger Bands were 11% narrower than normal.

Open High Low Close Volume___
158.520 158.650 157.250 158.100 3,516,552

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

Moving Averages: 10-period 50-period 200-period
Close: 156.24 173.24 162.89
Volatility: 34 38 44
Volume: 4,018,792 3,908,571 3,979,952

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 down today (bearish) 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 2.9% 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 25 periods.

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