It’s all change over at Chinese e-commerce king Alibaba Group Holding Limited (NYSE:BABA)

It’s all change over at Chinese e-commerce king Alibaba Group Holding Limited (NYSE:BABA)

It’s all change over at Chinese e-commerce king Alibaba Group Holding Limited (NYSE:BABA)

It’s all change over at Chinese e-commerce king Alibaba. The company recently announced that CFO Maggie Wu will replace Executive Vice Chair Joe Tsai as head of strategic acquisitions and investments. That’s as the company reorganizes several business divisions including DingTalk and Freshippo. Separately, in a recent 6-K filing, Alibaba proposed a one-for-eight stock split, to increase “flexibility in the company’s capital raising activities, including the issuance of new shares.”

Following the news, top-rated Stifel Nicolaus analyst Scott Devitt reiterated his bullish outlook on the stock. “We recently added shares of BABA to the Stifel Select List and continue to recommend the idea for investors with long-term investment horizons” said the analyst.

He approves of the recent developments at BABA. For, example, the analyst writes of Maggie Wu’s new appointment: “Wu has been CFO since 2013 and first joined Alibaba in 2007; we view her increased responsibilities at the top of the organization as a natural progression in the company’s leadership.”

More importantly, he views the stock split proposal as a step towards a reported Hong Kong listing. Indeed, Alibaba recently filed confidential paperwork for a listing on the Hong Kong stock exchange with plans to raise as much as $20B, according to multiple news reports.

“New capital could be deployed for buybacks or to extend the company’s competitive lead” contends Devitt. “Investors in mainland China, who can buy and sell Hong Kong-listed stocks through a cross-boundary trade link, could also stimulate demand for shares” the analyst added.

In total the company has received 15 back-to-back buy ratings from the Street over the last three months. They are predicting (on average) 28% upside potential from current levels.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 183.34.

The projected lower bound is: 162.77.

The projected closing price is: 173.05.

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.

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 7 falling windows in the last 50 candles–this makes the current falling window even more 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 65.2904. This is not an overbought or oversold reading. The last signal was a sell 16 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 60.25. 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 79. 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 20 period(s) ago.

Rex Takasugi – TD Profile

ALIBABA GRP ADR closed down -1.370 at 173.300. Volume was 22% below average (neutral) and Bollinger Bands were 5% wider than normal.

Open High Low Close Volume___
173.550 173.820 172.820 173.300 2,803,468

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

Moving Averages: 10-period     50-period     200-period
Close: 170.93 168.57 163.09
Volatility: 26 38 43
Volume: 3,854,370 4,334,603 3,916,623

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 6.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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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