Alibaba Group Holding Limited (NYSE:BABA) remains largest global short

Alibaba Group Holding Limited (NYSE:BABA) remains largest global short

Alibaba Group Holding Limited (NYSE:BABA) remains largest global short

Alibaba Group Holding Ltd.’s short sellers have gotten burned this year as optimism about a possible trade resolution has lifted the company’s American depositary shares.

Short interest in Alibaba BABA, -0.45%  has grown faster than general short interest in Hong Kong/China names so far in 2019, according to data from S3 Partners, but these bearish calls have thus far proven a bad bet. Alibaba short sellers are down $5.49 billion in mark-to-market losses on a year-to-date basis, or 29%. These paper losses outweigh the $3.89 billion in mark-to-market profits that shorts picked up in 2018 as Alibaba shares fell, according to S3, a financial technology and analytics firm.

Alibaba remains the biggest global short, and it accounts for more than a fifth of total short exposure in the Hong Kong/China universe. The Chinese e-commerce giant is one of just a handful of names in the sector that have seen meaningful increases in the number of shares shorted so far this year, S3’s Ihor Dusaniwsky said in a report. Total Alibaba short interest amounts to $20.8 billion, well above Ping An Insurance, which clocks in second in terms of short exposure for China names, at $12.8 billion.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 167.44.

The projected upper bound is: 194.83.

The projected lower bound is: 175.47.

The projected closing price is: 185.15.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 67.5751. This is not an overbought or oversold reading. The last signal was a sell 1 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 69.32. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 60. This is not a topping or bottoming area. The last signal was a sell 1 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 7 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -0.830 at 184.170. Volume was 48% below average (neutral) and Bollinger Bands were 16% wider than normal.

Open High Low Close Volume___
184.380 185.590 183.050 184.170 2,087,419

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 182.33 160.47 168.45
Volatility: 28 41 43
Volume: 3,069,193 3,296,170 4,190,890

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 is currently 9.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 35 periods.

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