BOC International Niki: Key Support Levels and Warrant Fund Flow for China Mobile After VAT Increase

February 3rd [BOC Guest]: Hang Seng Index, China Mobile, Zijin Mining, Zijin Gold International, Pop Mart, Xiaomi Group

The Hong Kong stock market has recently experienced increased volatility, with the three major telecom operators becoming the market's focus due to a tax reform announcement. As the industry leader, China Mobile (00941.HK) is currently at a very critical technical level, with bulls and bears fiercely competing around a core price range. This article will analyze the short-term technical aspects, combined with the latest market news and derivatives data, to break down the logic of this competition and potential strategies for investors.

Technical Analysis: Key Support Levels in Oversold Territory Under Contention

Based on the latest technical data, as of the February 3 close, China Mobile's share price stood at 78.3 yuan, up slightly by 0.38%. However, the overall technical pattern shows clear adjustment characteristics and potential reversal signals. Today’s rebound was 1.09%, with the share price closing at 79.15 yuan.

On one hand, the downward adjustment trend in the share price is evident. The current share price has fallen below all key moving averages, including the 10-day (79.29 yuan), 30-day (80.84 yuan), and 60-day (83.77 yuan) lines, with the moving averages showing a bearish alignment, indicating that short- to medium-term adjustment pressures remain. This aligns with the previous trend where profit-taking occurred after a wave of gains due to external news influences.

On the other hand, strong technical rebound signals are brewing. Most notably, the Relative Strength Index (RSI) has dropped to 40, entering the traditionally oversold territory. Typically, this means selling pressure may have been excessively released in the short term. More definitive signals come from advanced momentum indicators: both the Bull/Bear Power Indicator and Momentum Oscillator have issued 'buy' signals, suggesting bullish forces are accumulating. This combination of 'weak trends' and 'oversold indicators' indicates the market might be nearing a turning point for short-term trading, with the critical support levels serving as confirmation signals.

Support and Resistance Analysis: Focusing on Core Price Range

Considering the technical patterns and market psychology, China Mobile’s short-term key levels are very clear at present.

* Lower Support Zone: 76.7 yuan and 74.9 yuan

The first important line of defense currently lies at 76.7 yuan. This level represents not only the psychological threshold following short-term overselling but also aligns closely with the low point (approximately 75.85 yuan) formed on February 2 due to market selloffs triggered by negative news, creating the first buffer zone. Whether this level holds or not will be the first observation point to determine whether this news-driven correction has ended. If this position fails, the market may test a stronger second support level at 74.9 yuan. This area will serve as the last solid barrier for bulls; if it fails, it could indicate that the short-term trend has completely weakened.

* Resistance areas above: 80.4 yuan and 82.1 yuan

For the stock price to launch an effective rebound, the primary task is to challenge the resistance at 80.4 yuan. This level is near the convergence of the 10-day and 30-day short-term moving averages, where significant technical selling pressure is expected. The more critical threshold is at 82.1 yuan, which is not only a round-number level but also close to the 60-day long-term moving average, making it an important watershed for whether the stock price can return to the previous consolidation platform and reverse the short-term downtrend.

The recent fluctuation in China Mobile's stock price has been primarily driven by a specific tax adjustment. According to company announcements and relevant market news, starting February 1, 2026, the applicable VAT rate for telecom services will increase from 6% to 9%. The market generally believes this will directly raise the tax burden for operators, thereby impacting the company’s revenue and profits in the short term, which led to a collective adjustment of the three major telecom stocks on February 2.

In the February 3rd episode of 'BOC Guest,'Niki, a director at BOC International,provided a detailed analysis of the market. She pointed out that after the announcement of the tax rate increase, relevant companies confirmed the news, and the market's attention was high, leading to a significant adjustment in related stocks on February 2nd. However, she also observed that by February 3rd, the market situation had stabilized. China Mobile's share price rebounded to around 78.5 yuan after hitting a low near 75 yuan. A key market signal is that during the period when the stock price retreated to lower levels, there was significant inflow into its related bullish products, indicating that some investors believe short-term negative factors have been digested and are starting to bet on a rebound. Regarding specific products,Nikishe noted that most investors choose China Mobile's call warrant 24413$BI-CMOB@EC2609A.C (24413.HK)$as a tool to bet on the rebound. For bearish investors, she mentioned they can refer to China Mobile's put warrant 21625$BI-CMOB@EP2604A.P (21625.HK)$. HostSimonFurther analysis indicates that the strike price of this put warrant is 75.83 yuan, and yesterday's low was very close to this price, providing a reference point for investors who remain bearish. Meanwhile, he mentioned that the call warrant 24413 has a relatively distant expiration date, approximately over half a year, with a strike price around 88 yuan and leverage of about 12 times, making it a useful reference for investors seeking opportunities in short-term rebounds.

Warrants and Bull/Bear Contracts: Review and Product Advantage Analysis

In situations like China Mobile's event-driven sharp fluctuations, warrants and bull/bear contracts offer investors efficient tools to participate in the market and express different views. Their core advantages lie in strategic precision and capital efficiency.

Reviewing the performance of the products mentioned on January 30th demonstrates this characteristic vividly. Amidst the underlying stock declining by 1.88% over the following two days:

- BOC Put Warrant (21625) rose 28% in price

- The price of the Citic Put Warrant (21480) increased by 23%

- The price of the UBS Bear Certificate (56287) increased by 7%

- The price of the BNP Paribas Bear Certificate (57946) increased by 6%

These products successfully hedged and amplified the downside movement of the underlying stock, clearly demonstrating the value of derivatives as risk management or trend-following tools when directional judgments are correct.

Current product terms analysis and related deployment: Considering that China Mobile's stock price is currently grappling near the key support level of 76.7 yuan, we have outlined the following product strategies for investors with differing views:

Bullish direction: Betting on an oversold rebound to challenge resistance levels

If investors believe that the short-term impact of the tax adjustment has been largely absorbed, and technical overselling could trigger a rebound, they may consider the following products. For instance, BOC Call Warrant (24413) $BI-CMOB@EC2609A.C (24413.HK)$ , which offers about 10.6 times leverage and a strike price of 88.88 yuan. This strike price is relatively far from the current stock price, making it an out-of-the-money warrant, whose 'relatively low premium' characteristic makes it suitable for betting on upside elasticity when the stock price challenges resistance levels at 80.4 yuan or even 82.1 yuan. Another UBS Group call warrant (24989) $UB-CMOB@EC2609A.C (24989.HK)$ has similar terms. For investors seeking higher leverage and willing to bear recovery risks, HSBC Bull Contract (53864) and BNP Paribas Bull Contract (55114) have recovery prices set at 74 yuan and 75 yuan respectively, very close to the second support level of 74.9 yuan, offering actual leverage as high as 19 times, making them powerful tools for betting on a rebound.

Bearish Direction: Betting that the correction has not ended, continuing to test support levels

If investors believe market sentiment remains unstable and the stock price may continue to test the support at 74.9 yuan, they can pay attention to put warrants or bear contracts. For example, Citic Put Warrant (21480), with a strike price of 75.88 yuan, is close to the first support level of 76.7 yuan, offering the characteristic of 'highest leverage.' Bank of China Put Warrant (21625) $BI-CMOB@EP2604A.P (21625.HK)$ has a strike price of 75.83 yuan, providing the cost advantage of having the 'lowest premium and implied volatility.' Additionally, UBS Group Bear Contract (59825) $UB#C MOBRP2604F.P (59825.HK)$ has a stop-loss price set at 90 yuan, far from the current stock price, offering a wider safety buffer, making it suitable for long-term hedging or moderately bearish strategies.

It is crucial to note: high leverage means high risk. Bull and bear contracts have a mandatory stop-loss mechanism; once the underlying stock price hits the stop-loss level, the product will immediately cease trading. Meanwhile, warrant values erode over time. All decisions must be based on a full understanding of the product terms and independent judgment of the underlying stock's movement.

Interaction and Reminders

After all this discussion, in the tug-of-war between news and technical overselling for China Mobile, which side does your intuition lean towards?

A. Betting on a rebound

B. Expecting a correction

C. Waiting and observing

Feel free to share your choice in the comments section, let’s discuss! Lastly, a friendly reminder: Warrants and bull/bear contracts are complex financial derivatives with potentially high risks and could lead to the loss of entire principal. Before investing, please carefully read the relevant listing documents to ensure complete understanding of the product features. For more analysis on Hong Kong stock warrants and bull/bear certificates, this is Jenny, see you next time!

Disclaimer: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.

$Hang Seng Index (800000.HK)$$Hang Seng TECH Index (800700.HK)$$Hang Seng China Enterprises Index (800100.HK)$

#China Mobile #Technical Analysis #Support and Resistance Levels #Warrants #Bull and Bear Certificates #Hong Kong Stock Short-term #Telecom Stocks #Premium #Oversold Rebound #Event Driven

$CHINA UNICOM (00762.HK)$ $CHINA TELECOM (00728.HK)$

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