April 16 [HKEX Podcast] Part-1-Hang Seng Index, CATL, Ganfeng Lithium,

1. The Hang Seng Index rebounded close to the resistance zone; the 27,300-point mark still requires breaking through the 26,750-point level first.

The Hang Seng Index closed at 26,394 points on April 16, with an intraday high of 26,403 points and a low of 26,123 points. The trend continues the rebound from the low of 24,203 points, but it has gradually approached the medium-term resistance zone. In the short term, the market has transitioned from recovery to testing key resistance levels. From the daily chart structure, the index has recently regained support above the 5-day, 10-day, 20-day, and 30-day moving averages, indicating a clear improvement in short-term sentiment. Even the 60-day moving average has been reclaimed, reflecting that investor sentiment is more positive about the future compared to before. However, the current price is still constrained by the vicinity of the 120-day moving average. Meanwhile, the range between 26,750 and 27,300 points represents a significant resistance zone. Therefore, although the market appears strong at this stage, a full breakout has not yet been confirmed.

For investors optimistic about the future market, the 27,300-point level can indeed be considered the next target, but the prerequisite is not merely emotional optimism. The index must first effectively break through 26,750 points and stabilize above 26,300 points to push the rebound further towards 27,300 points. Otherwise, if the initial resistance cannot be broken, the current upward movement should still be regarded as a continuation of the rebound from the lows rather than confirmation of a new uptrend unfolding. In other words, while 27,300 points can be targeted, surpassing 26,750 points is the most practical short-term observation point.

As for investors who previously held bullish warrants with a redemption price near 25,907 points and chose to take profits, this approach is quite reasonable. This is because the index has already rebounded significantly from its lows and is now approaching the resistance zone. Although there is still room for upward movement in the short term, it is no longer the most ideal position for betting on a low valuation. Especially around the 25,900-point level, which is close to the current short-term support zone, since the previous rebound has successfully captured gains, locking in profits near the resistance zone is a prudent approach in momentum trading. If the market subsequently experiences a retest and holds steady or confirms a strengthening after breaking through 26,750 points, redeployment could offer better risk-reward prospects.

On the other hand, investors who are bearish on the market believe that there is already pressure at the 26,400-point level, which has a certain basis in the short term. After all, today's high for the index was around 26,403 points, very close to the market-expected pressure point of 26,400, indicating that resistance is starting to build up in this area. If the market fails to break through and stabilize above this level, in the short term, there may be a pullback to test support at 26,300 points or even 26,120 points. However, if one chooses to hold bearish warrants with a recovery price of 27,600 points overnight, it should be understood that this is a defensive bearish strategy. Since 27,600 points is still quite far from the current price, triggering a recovery might not happen soon. But if the index subsequently breaks through 26,750 points and gradually moves towards 27,300 points, the pressure on the bearish warrant side will significantly increase. Therefore, while such deployment isn't wrong, the premise must be that the market remains consistently constrained between 26,400 and 26,750 points; otherwise, the rationale for being bearish will gradually weaken.

Overall, the most noteworthy aspect of the Hang Seng Index now is not whether the market unilaterally looks towards 27,300 points or believes there is pressure at 26,400 points, but whether the range between 26,300 and 26,750 points can achieve a confirmed breakout. If it stabilizes above 26,300 points and breaks through 26,750 points, the rebound could expand further to 27,300 points. However, if there continues to be pressure around the 26,400 to 26,750 point range, the index might still retreat to consolidate and retest support at 26,120 points or even 25,800 points. Currently, short-term sentiment has indeed improved, but it is not yet the stage for unconditional chasing prices. A higher-value strategy would still be to wait for confirmation of the breakout or to deploy after a pullback.

2. CATL hits another new high; the short-term trend remains strong, but the 720-730 yuan range begins to enter a high-pressure testing zone.

CATL closed at 714.5 yuan on April 16, with an intraday high of 729 yuan and a low of 682.5 yuan, showing significant daily gains, extending its medium-term upward trend, and once again approaching previous highs. Observing the daily chart structure, the stock price had steadily risen from around 449.12 yuan and accelerated recently, firmly staying above the 5-day, 10-day, 20-day, and 30-day moving averages, with both the 60-day and 120-day moving averages clearly below, indicating that this is not just a regular rebound but rather a strong uptrend. However, as the share price rises above 700 yuan, it enters a phase of testing high levels. Although no obvious signs of weakening have emerged yet, the upward potential is not as broad as when starting from lower levels.

Looking solely at the upside potential, the first short-term step is to see if it can stabilize above 700 to 705 yuan. As long as this region holds, the uptrend may continue, with the next focus being whether it can break through the 729 yuan high. If successful, the next target could be near 750 yuan or even higher. However, if it fails to break through 729 yuan effectively, the more likely scenario is consolidation at high levels, digesting the recent gains before determining the next direction. In other words, while there is still upside potential, the stock has shifted from being 'worth betting on at lower levels' to 'following the trend at higher levels,' making operations more challenging than before.

For investors who remain bullish on the future outlook and hold call warrants with an exercise price of 788.5 yuan, the direction isn’t without merit since the underlying stock’s trend remains strong and moving averages haven’t been breached. As long as the stock price stays above 700 yuan, these slightly out-of-the-money call warrants could still benefit from further upward tests of the underlying stock. However, it’s important to note that the 788.5 yuan exercise price is still some distance from the current price, meaning these products rely heavily on the underlying stock continuing to accelerate upwards. If the stock price merely hovers at high levels, time decay pressure will gradually emerge. Thus, this type of deployment represents an aggressive bullish view rather than conservative trend-following.

As for investors choosing to take profits by exiting call warrants with an exercise price of 1,000.1 yuan, this approach is quite reasonable. The 1,000.1 yuan strike price is extremely out-of-the-money, so the product inherently requires substantial subsequent explosive power from the underlying stock. While the underlying stock is currently strong, it has risen above 700 yuan and is approaching previous highs and the upper Bollinger Band. Locking in profits now is a pragmatic move. Especially at these high levels, even if the underlying stock continues upward, any slight slowing of momentum could significantly pressure deep out-of-the-money call warrants. Therefore, exiting for profit doesn’t indicate a misjudgment of direction but reflects a shift from aggressive to conservative tactics.

Overall, CATL remains in a strong upward trend, with 700 yuan being a crucial support level for the continuation of the short-term uptrend, while 729-730 yuan represents the immediate resistance. If it can stabilize above 700 yuan and break through 729 yuan, the uptrend could advance towards 750 yuan. However, if the breakout fails, caution is advised for possible consolidation between 700 and 730 yuan. At this stage, while there is still some short-term value, it is no longer in the phase of accumulating at lower levels but rather following the trend, with deployments based on holding key positions and confirming breakouts.

3. After hitting a new multi-stage high, Ganfeng Lithium slightly pulled back, with 80 yuan indeed being a critical short-term level, though it is not yet at the stage where it can be viewed as having no resistance to upward movement.

Ganfeng Lithium closed at 84.15 yuan on April 16, with an intraday high of 84.85 yuan and a low of 78.80 yuan. The stock price continued its recent strong upward trend, pushing closer to a new multi-stage high, with the overall trend clearly bullish. From the daily chart structure, the stock price consolidated within the 55-60 yuan range earlier and gradually strengthened, recently continuously staying above the 5-day, 10-day, 20-day, and 30-day moving averages. Short-to-medium term moving averages are diverging upwards, reflecting that the uptrend has evolved from a rebound into a more defined upward trend. Currently, the Bollinger Bands also show a clear upward widening, with the stock price continuously running close to the upper band, indicating that market participants’ willingness to chase prices is still present. However, after a period of sharp increases, short-term volatility at high levels has started to increase.

Investors believe that the level of 80 yuan has strong support, and this view has a solid foundation. This is because 80 yuan is not only a psychological price level, but also close to the recent pullback support area after the breakout, as well as the upward shift in short-term moving averages. If the stock price pulls back later but can still hold steady above 80 yuan, it indeed indicates that the upward structure remains intact, and the market still has conditions to maintain strength. In other words, 80 yuan can be regarded as the current short-term watershed. As long as it holds firm, the overall trend will remain a consolidation phase before another upward push.

However, suggesting that once the price stabilizes at 80 yuan it will soar without resistance would be overly optimistic. The reason is that although the stock is in a strong upward trend, the current price is already approaching the intraday high of 84.85 yuan, as well as the upper Bollinger Band, indicating that there is some pressure in the short term. More importantly, the RSI has risen to relatively high levels, which reflects strong momentum but also means the stock is gradually entering an overheated zone. Even if the direction remains upward, the price may not rise linearly without any resistance; instead, it is more likely to consolidate with fluctuations near the highs, digesting profit-taking before seeking the next breakout.

Therefore, a more reasonable view at this point is to consider 80 yuan as the core support for whether the uptrend can continue, while the range around 84.85 yuan to 88 yuan can be seen as a short-term resistance zone that needs gradual digestion. If the stock price retraces to 80-81 yuan and quickly stabilizes again, then breaks through 84.85 yuan, the uptrend could potentially extend further towards 88 yuan or even higher. However, if it fails to hold above 80 yuan, it would indicate that the strong upward momentum is beginning to slow down, and the stock might need to retreat to around 78 yuan or lower to reconsolidate.

Overall, Ganfeng Lithium remains in a relatively strong uptrend at this stage. It is reasonable for investors to regard 80 yuan as strong support, but in the short term, it is not entirely without resistance, as it has entered a testing phase at higher levels. The key to the future trend does not lie in how optimistic one can be, but rather in whether the stock can hold above 80 yuan and subsequently break through 84.85 yuan. If it holds firm, the uptrend remains intact; if it fails, one should be cautious about a potential shift from a strong upward push to consolidation at higher levels.

Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. Market data, opinions, and analyses contained herein may change at any time without prior notice. We are not responsible for any losses or damages caused by reliance on the information in this article. Technical analysis only indicates whether certain technical conditions are met and should be used alongside other data for a comprehensive assessment of asset performance; trading decisions should not be made solely based on this article. Note that past performance is not indicative of future results. Follow Jenny’s HK warrants for more professional insights. $Hang Seng TECH Index (800700.HK)$$Hang Seng China Enterprises Index (800100.HK)$$BABA-W (09988.HK)$$TENCENT (00700.HK)$$MEITUAN-W (03690.HK)$

30K Views