HUGE ALIBABA STOCK DEAL! TECHNICAL ANALYSIS PRICE PREDICTION!!

felix here are we talking alibaba stock guys what 
is the update what is the news well we are going   to talk about one big news item that relates to 
the hong kong stock index uh hang seng index being   reconfigured and i'm going to explain exactly 
what that means and exactly how much money will   therefore flow into alibaba as a result of that 
and then secondly guys we're gonna do a chat   analysis we're gonna do a technical analysis 
to see where we're going how low can we go   where is the support where is this trending so 
watch out guys as always this is not financial   advisors it's just for entertainment only and 
for every one of your likes i donate one cent to   the gentleman these lovely fluffy creatures here 
this beautiful sanctuary so do please be generous   with your likes guys so let's get straight to 
it well let me explain this story here so the   hang seng index is basically the equivalent of 
sort of the the new york stock exchange index   p500 whatever you want to call it um dow jones or 
something like that at the moment it has 55 stocks   in its right that is going to increase to 80 
stocks by 2022 and then to 100 stocks eventually   as part of that the more important thing is that 
the maximum amount one company can be considered   to be as part of that index is going from 10 to 
8 percent that's bad for aia american insurance   and bad for 10 cent because they are both at 10 
they're gonna go down to eight percent now who   does it benefit well it the it benefits alibaba 
xiaomi and maitland why because they are currently   capped at five percent and that cap is increasing 
to eight percent are you with me so far so alibaba   so far is only five percent off the hang seng 
index that's the hong kong stock exchange index   it's going going to go up to eight percent as 
a weighted proportion of it and therefore etf   money has to flow into alibaba they have no choice 
to have to do it they have to match the index   and anything basically that tracks the hong kong 
the stock exchange index and saying index has   to do that now i looked at one of the biggest 
ones that is the hsi etf which is ticker 2833   that has a market cap of 5.38 billion us dollars 
and three percent of that because that's the   increase is 150 million us dollars from just one 
fund so you are going to get a fairly sizable   amount of money pouring into barber here just for 
that as there are obviously lots of tracker funds   not just the one so um you are basically going 
to get a moderate inflow that is going to be   very positive for the alibaba stock in the in the 
medium term and i think that is a big bit of good   news that we alibaba baba sufferers can do with 
so we've had a pretty tough ride and those of us   who are sticking with the stock like me um are 
you know that we deserve a medal at this point   so all good news is very welcome now let's have a 
quick look at we are here with the with the stock   i'm going to pull that up for you guys here you 
can see it too and let's do a quick um technical   analysis here firstly let's look at how low we 
can go where is our support line we closed at 2 41   yesterday and i'm going to zoom in a little 
bit here for you guys so it's a little   bit easier to see um here we go so we closed 
yesterday at uh 241 uh which is just below the   fibonacci support line here of 242 and the next 
support line since it's two four two three five   now i am sadly the bearer of bad news and that's 
the hong kong stock uh not the adr the usadr tr   is a basically a contract in the hong kong stock 
well it's a contract for eight uh you basically   get eight shares for your adr if you were to 
convert it which of course you are welcome to do   was down another two percent so therefore uh new 
york has to open somewhat in the red unfortunately   to match up they have to match up at the end or 
beginning of each day so um we are there therefore   235 is the next support line here from that point 
of view and and um there isn't really much else in   terms of support there so let's look at momentum 
see what's going on there let's look at the macd   here now the macd gave us a sell signal um let me 
just put a line in here guys approximately there   you can see it's slightly off but the chart so 
it doesn't allow me to move these these around   quite as much on the 19th of february basically 
we got a sell signal here and that certainly   was a good call from macd here because we've been 
selling off ever since and has it diminished well   it is still a sell signal however the last red bar 
here is a lighter color that means the volume is   the sell-off volume is less than the bigger bar 
here but that isn't isn't sort of a huge amount   of great news it is still in not definitely an 
auto buy signal here from the macd point of view   let's have a look at relatively strength index 
i quite like those two together i think they are   they make a nice couple really uh for all sorts 
of technical reasons so i'm going to put in here   a always do that a line at the 50-point mark and 
really for me only when you cross that 50-point   mark do you get a buy or sell signal so we had 
one here and we are hoping for another one here   but we are not there yet and if you're on a small 
screen guys i'll magnify that for you you see here   that was the cell signal there and again let me 
put a line in there uh that's a vertical line   there we go the topology these lines are slightly 
off uh this software doesn't seem to allow me to   put them right in the right place but really is 
where the point crossed there and again that was   the 19th of february so both macd and the rsi gave 
us that that signal there and that's usually a   fairly good one if you get both of them calling it 
at the same time then that's a pretty strong one   uh that i i might consider trading on except that 
i buy barber because i believe in it for the long   run so i'm holding these things for decades to 
come so i'm not not selling for sure and perhaps   buying some more so again where we are here well 
momentum is improved down here you can see the   line is trending upwards but it is far from the 
from a buy signal which is what you would get when   you cross that 50 point line there again so it's 
a moderate positive but not a huge one volatility   right so volatility fell off a cliffhanger as 
you can see and typically when the relative   volatility does fall of a clip the stock sells 
off now when you go very low typically there is a   resumption back in the other direction that's 
what we're seeing here it is moving up that   is positive momentum but it is at a relatively 
low level because really where you want to be   is you know look at where you need to be to get 
a rally you kind of need to go go back up like   quite a bit this was the last kind of rally we 
experienced here that was the volatility there   and previously we had a recovery you see like 
that so we are still again a little bit off that   and sadly this morning i think uh the hong kong 
news will drag baba down somewhat so it's not   going to you know keep going up in that particular 
straight line that that is just my conjecture here   the chart doesn't of course tell me that let's 
have a quick look if there's any short interest   in here that should worry us so at the moment the 
short interest and again let me show that to you   you can see down here the green line is a short 
interest the gray line is the um the volume   and um here you have the percentage figure so 
it isn't very much it's less than ten percent   therefore nothing particular to worry about um so 
let's move on then uh one or two more indicators   see what we've got here well actually one thing 
to look at is volume uh as always that is actually   quite important and often underestimated you 
can sort of see that our volumes here are pretty   low and i'll put that line here as a sort of 
exaggerated trend our volumes are pretty miserly   and and that generally speaking it leads to a 
sell-off you want bigger volumes to be able to   move stocks certainly if you want to move them 
away from their current trajectory here let's have   a quick look at williams r williams r is another 
momentum indicator which moves faster typically   than the rsi and where are we well we are down 
here in well what i call the oversold territory   basically anything below that sort of long 
dotted line here is the oversold territory   and we are very much down there now if you go 
back a little bit that's what should happen you   come out of the oversold territory and you spike 
back up and that can cause a a bit of a rally but   we are still very much down here in the 
dog's house so um sadly guys not much   good momentum news here on the stock eyes on some 
new headlines and the ft today again lamenting you   know jack ma is no longer the richest person in 
china that sort of nonsense which quite frankly   isn't particularly interesting and it isn't 
particularly useful to this and making this   constant connection between jack ma and alibaba 
isn't particularly helpful either because jack ma   is at this point a minority shareholder 4.8 or so 
so there we are though those of us who believe in   the long-term value play here of a company which 
is highly profitable for the fantastic margins   and a thriving business but keeps getting hitting 
over the head every day well i think we're going   to have to suffer a little bit longer here and 
there is a little bit of that good news of the   index change here which will put a bit of etf 
money into this stock but will it be enough well   i'm going to keep watching this stock here 
guys and i'm going to keep telling you   what my views are for it as always my chart 
analysis and everything i do guys you can   all the links to these charts are over on our 
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all your support thanks very much for tuning in

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