Alibaba Group Holding Limited (NYSE:BABA) will acquire a cross-border e-commerce business unit, Kaola

Alibaba Group Holding Limited (NYSE:BABA) will acquire a cross-border e-commerce business unit, Kaola

Alibaba Group Holding Limited (NYSE:BABA) will acquire a cross-border e-commerce business unit, Kaola

Alibaba said Friday it will acquire a cross-border e-commerce business unit, Kaola, from the Nasdaq-listed Chinese internet company NetEase for about $2 billion.

Kaola sells imported products in China that include clothes, consumer electronics, and sports accessories. It is one of the biggest Chinese e-commerce sites focused on selling imported goods in the country, alongside Alibaba’s Tmall Global and JD.com’s JD Worldwide.

Alibaba said it plans for Kaola to continue operating independently under its current brand, but it will have a new leader at the helm. Tmall Import and Export General Manager, Alvin Liu, will take over as CEO.

With Tmall Global and Kaola, Alibaba will have a massive market presence in the cross-border e-commerce sector.

With Alibaba’s acquisition of Kaola and its investment into NetEase Cloud Music, NetEase can “further optimize its costs while Alibaba strengthens its leadership in cross border ecommerce,” Jefferies analysts wrote in a note on Friday.

China is one of the largest e-commerce markets in the world, with research firm eMarketer predicting in a June report that in 2019 the country will have $1.935 trillion in e-commerce sales, about three times more than the United States.

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 168.88.

The projected upper bound is: 186.93.

The projected lower bound is: 166.76.

The projected closing price is: 176.84.

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 22 white candles and 28 black candles for a net of 6 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with ALIBABA GRP ADR). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

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 83.3150. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 5 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 57.67. 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 22 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 81. 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 4 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -2.250 at 176.690. Volume was 65% below average (consolidating) and Bollinger Bands were 5% narrower than normal.

Open     High      Low     Close     Volume___
179.000 179.000 176.210 176.690 1,337,489
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 171.43 170.40 167.28
Volatility: 40 38 39
Volume: 2,155,657 3,095,834 3,568,454

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 5.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 11 periods.

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