The Hang Seng Index rebounded and stabilized above the short-term moving averages, but internal signals show significant divergence

On the previous day (March 16), the index closed at 25,834.02 points, up 1.38% in a single day, with a trading volume of 264.453 billion yuan. Observing the daily chart trend, after retreating from the earlier high of 28,056, the index once tested 24,906, followed by a technical rebound. Recently, it has returned to around the 25,800 level, still in the recovery phase after the pullback.

Regarding short-term moving averages, the 5-day line is approximately at 25,775, and the 10-day line is around 25,637. The index has now moved back above these two short-term moving averages, indicating that the short-term downward trend has eased somewhat. However, for medium-term moving averages, the 20-day line is about 26,130, the 30-day line is around 26,444, and the 60-day line is near 26,376. The index remains below several medium-term moving averages, reflecting that the medium-term trend has not fully reversed and currently resembles a consolidation pattern after the rebound.

The Hang Seng Index’s RSI indicator is at 41, in a neutral-to-weak range, not entering overbought or oversold territory, showing that market buying momentum has recovered somewhat but is still not strong enough; the Hang Seng Index technical signal is 'Buy', with a signal strength of 7, representing a moderately strong bullish signal, resonating with yesterday's rebound trend.

Clear reference for support and resistance levels: Short-term support is divided into two levels, with the first support at 25,340 and the second support at 25,130. If the second support is broken, the index may further test the area near 24,900; short-term resistance is also divided into two levels, with the first resistance at 25,860 (near the previous day's high) and the second resistance at 26,100. If the second resistance is broken, the index could advance towards the area near 26,463, and subsequent breakouts should be closely monitored.

It is worth mentioning that our 【HK Stock Broadcast】 also provided commentary on the Hang Seng Index (HSI), and yesterday's trend was in line with technical recovery expectations without any unexpected fluctuations.

On March 16th, blue-chip stocks showed a widespread increase. Only Ping An remained flat while others generally rose, but technical signals exhibited significant divergence:

On one hand, most blue chips received bullish signals, including Tencent (00700), Alibaba (09988), Meituan (03690), and six other stocks, all receiving "Buy" or "Strong Buy" signals. Among them, Xiaomi Group (01810) stood out the most, with a single-day increase of 5.64%, breaking through and stabilizing above the 10-day and 30-day moving averages. The technical signal issued a "Strong Buy," with a signal strength as high as 9, showing significant technical improvement.

On the other hand, two core weighted stocks showed differing signals. Although China Construction Bank (00939) and China Mobile (00941) saw their stock prices rise, with China Construction Bank even standing above all major moving averages, both stocks' technical signals were "Strong Sell" with a signal strength of 9, forming a noticeable price-signal divergence. This detail deserves investors’ attention.

To briefly summarize the technical highlights of each stock: Tencent has stabilized above short- to medium-term moving averages, Alibaba and Meituan have seen mild rebounds, HKEX (00388) and AIA (01299) are in technical recovery phases, Ping An (02318) is consolidating sideways, and HSBC (00005) is now above the 60-day moving average. Overall, the technical picture shows a "mostly positive, some warning" pattern.

Review and Selection of Warrants and Bull/Bear Products: Strong performance during the rebound market

(I) Review of previous Warrant Bull/Bear performance:

Reviewing the HSI-related CBBCs and bull/bear products recommended on March 10th, their performances were impressive: J.P. Morgan Bear Certificate (65920) gained 12% in two days, UBS Bear Certificate (68680) gained 14% in two days, while UBS Put Warrant (23089) and BOC Put Warrant (23127) rose by 5% and 6%, respectively, outperforming the HSI during the same period, providing valuable reference for investors focusing on derivatives.

(2) Warrant Product Selection:

In conjunction with the Hang Seng Index's rebound trend, two high cost-performance warrant products are selected for investor reference:

1. HSI UBS Call Warrant (23090): Actual leverage 15, strike price 26,733. Its main advantage is its relatively low premium, making it suitable for investors optimistic about a short-term HSI rebound and seeking steady leveraged returns.

2. HSI HSBC Bull Certificate (54709): Actual leverage 26.9, strike price 24,900. With the lowest premium and higher actual leverage, it is suitable for investors who are more optimistic about the short-term trend of the HSI and can tolerate certain volatility.

Risk Warning: Warrants and bull/bear certificates are derivatives with significant volatility. Investors should align with their risk tolerance, participate rationally, and avoid blindly following.

The overall market sentiment was positive yesterday, with the blue chips driving a rebound in the Hang Seng Index. However, do not blindly chase highs. For stocks receiving 'buy' signals with moderate gains, cautious attention can be maintained; for stocks showing divergence between price and signal, it is recommended to stay on the sidelines and observe whether the signal will recover, avoiding potential pitfalls.

With the HSI stabilizing above short-term moving averages, would you continue holding blue chips or reduce your position appropriately? A. Continue holding. B. Reduce position appropriately. C. Stay on the sidelines. Feel free to share your thoughts in the comments section.

Reminder: 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.

#HKStocks #HSI #LiveAnalysis #WarrantSelection #WarrantStrategy #DerivativesHedging #BlueChipStocks #FinancialSector #TechnicalAnalysis

82K Views