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What Alibaba Group Holding Limited (NYSE:BABA) Investors Should Know About the 1-for-8 Proposal


What Alibaba Group Holding Limited (NYSE:BABA) Investors Should Know About the 1-for-8 Proposal

An Alibaba stock split proposal has been made by the company in an effort to increase its number of shares.

Here’s what investors in Alibaba (NYSE:BABA) need to know about the stock split proposal.

  • The Alibaba stock split would have the company dividing one share into eight shares.
  • This means that the company will be increasing its number of shares from 4 billion to 32 billion.
  • The company says that it will be holding a vote on the Alibaba stock split proposal during its annual shareholders meeting.
  • This meeting will be taking place on July 15, 2019.
  • If shareholders approve of the stock split, the Alibaba says that it will occur no later than July 15, 2020.
  • The company is advising shareholders in BABA stock to vote in favor of the plans to split the stock.
  • Alibaba claims that the stock split will also create a lower point of entry for more investors.
  • It says that this will give the company more flexible capital to work with in the future.
  • The stock split may have to do with the company’s plans to hold an initial public offering in Hong Kong.
  • Some reports claim that the company may be able to raise as much as $20 billion from an IPO in Hong Kong.

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 169.69.

The projected lower bound is: 149.29.

The projected closing price is: 159.49.


A white body occurred (because prices closed higher 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.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with ALIBABA GRP ADR), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) 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 37.8945. This is not an overbought or oversold reading. The last signal was a sell 3 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 46.58. 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 9 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 64. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.


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 up 1.810 at 159.910. Volume was 16% above average (neutral) and Bollinger Bands were 25% narrower than normal.

Open High Low Close Volume___
157.610 160.530 157.610 159.910 3,883,933

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

Moving Averages: 10-period 50-period 200-period
Close: 157.24 172.82 162.80
Volatility: 34 38 44
Volume: 3,950,309 3,911,623 3,986,001

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.


ALIBABA GRP ADR is currently 1.8% 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 volume flowing into and out of BABA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BABA.N and have had this outlook for the last 26 periods.

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