Alibaba Group Holding Limited (NYSE:BABA) shares rise in Hong Kong market debut after completing biggest IPO in 2019

Alibaba Group Holding Limited (NYSE:BABA) shares rise in Hong Kong market debut after completing biggest IPO in 2019

Alibaba Group Holding Limited (NYSE:BABA) shares rise in Hong Kong market debut after completing biggest IPO in 2019

Alibaba Group Holding’s shares rose in early trading on their Hong Kong market debut after the Chinese technology company completed the world’s biggest stock offering this year.

The shares changed hands at HK$188.10 at noon local time, a premium of 6.9 per cent over its offer price of HK$176. They earlier rose to as high as HK$189.50. The increase follows a 2 per cent rally in its New York-listed shares to US$190.45 on Monday.

If sustained, the gain will rank among the best first-day performances involving the biggest IPOs in the city since 2005, after AIA Group (17.1 per cent), Bank of China (15.3 per cent), Industrial and Commercial Bank of China (14.7 per cent) and China Unicom (8.9 per cent).

The Alibaba listing comes as a shot in the arm for Hong Kong at a time when the city is seeking to rebound from its worst political crisis in history, with the economy in a technical recession. The local bourse has recouped some of the losses since its worst drubbing in four years last quarter, and companies including Budweiser Brewing Company APAC have revived and completed their stock offerings to help the exchange climb to the top of global IPO league table this year.

Financial Secretary Paul Chan Mo-po and Hong Kong Exchanges and Clearing chairwoman Laura Cha Shih May-lung, attended the listing ceremony. Alibaba chairman and chief executive Daniel Zhang, executive vice-chairman Joe Tsai and chief financial officer Maggie Wu were also present, while founder Jack Ma delivered a video message preceding the debut.

Technical Indicators

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 176.62.

The projected upper bound is: 200.55.

The projected lower bound is: 180.89.

The projected closing price is: 190.72.

Candlesticks

A white body occurred (because prices closed higher 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 24 white candles and 25 black candles for a net of 1 black 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.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 88.5714. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 65.61. 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 78 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 212.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 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 sell 5 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed up 3.670 at 190.450. Volume was 49% above average (neutral) and Bollinger Bands were 27% narrower than normal.

Open     High      Low     Close     Volume___
188.380 190.710 187.890 190.450 4,429,190
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 185.20 176.70 174.20
Volatility: 25 36 35
Volume: 3,114,903 3,058,371 3,254,715

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 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 moderate flows of volume into BABA.N (mildly bullish). Our trend forecasting oscillators are currently bullish on BABA.N and have had this outlook for the last 19 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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