Kicking off the year with a bang! Multiple sectors in Hong Kong's stock market are quietly gaining m
1. HSI: Some bullish investors continue to be optimistic about the index reaching 27,000 points and are still holding bull contracts with a stop-loss level of 25,854 points. Bearish investors believe the small rebound has ended and predict a further drop of 300-400 points, holding bear contracts with a stop-loss level of 27,300 points.
Simon: Hello everyone! Today we will continue to review the situation of Hong Kong stocks. Remember, today's stock market—first looking at the Hang Seng Index—it has retreated somewhat. This means that after reaching a high point yesterday, there has been some adjustment today. As mentioned in the past two days, particularly regarding short-term technical signals, we noted more sell signals. Sometimes, these technical signal summaries can provide useful references. Of course, we’re not saying that the moment we talk about it today, the corresponding trend will appear tomorrow. However, if some short-term signals are indeed strongly positive or negative, we will give feedback so you have more information for reference.
Alright, let’s first take a look at investor sentiment. Optimistic investors continue to believe that the index may rise to 27,000 points. If it really rises to 27,000 points, it could be higher than the previous peak. They have also been buying bull contracts. On the other hand, bearish investors think this small rebound is coming to an end and that there may be further declines. Of course, it’s normal for some people to be bullish and others to be bearish in the market—I always say this. Having both optimists and pessimists makes for a balanced market; being overly one-sided isn’t necessarily a good thing.
Alright, let’s take a look. Regarding the current summary of technical signals, there are still more sell signals—10 sell signals and 5 buy signals. Therefore, in the short term, the market outlook may not be very optimistic. Investors who are optimistic about the index reaching 27,000 points may need to break through the first resistance level first. The first resistance level is around 26,800 points. If it breaks through 26,800 points, then there is indeed a chance to rise to 27,000 points or even higher levels. Reviewing the data, 26,800 points was roughly yesterday’s high, which can serve as a reference.
On the flip side, if there is indeed a decline, investors think it might fall by 300-400 points to around 26,000 points. Looking at support levels, it may drop even lower, with the support level around 25,800 points. If it breaks below that, it might even fall to 25,300 points. These figures can also serve as references. $BI#HSI RC2808J.C (61877.HK)$$BI#HSI RC2808L.C (60819.HK)$$BI-HSI @EC2605B.C (23128.HK)$$JP-HSI @EC2605A.C (22977.HK)$


1. Hong Kong Exchange (00388.HK): The trend is relatively strong. Is there a chance to challenge the 440 level? In the warrant market, holding call warrants with an exercise price of 488.2.
Simon: Hong Kong Exchange (0388) performed pretty well today (7th), unlike the Hang Seng Index. Today’s movement was relatively stronger. You can see it staying at a high position; of course, stock prices fluctuate, but at least the closing price for now stands above the top of the Bollinger Band, firmly positioned around 430.
Investors remain optimistic about Hong Kong Exchange (0388). If we look at resistance levels, 440 may still need some time as the current short-term resistance is around 438. If it breaks through 438, there’s indeed a chance to reach 440. So, the first thing to watch today is whether it can break 438. However, note that technical signals are still primarily 'sell' signals—11 sell signals vs. 6 buy signals. Therefore, Hong Kong Exchange's short-term trend might weaken slightly, which investors should keep in mind.

If you really want to participate in warrant trading, for Hong Kong Exchange, it’s better to choose products closer to the current price. Of course, if you select products with higher exercise prices, like above 480, the out-of-the-money percentage would be large, around 13%. Although the leverage is quite high, reaching over 8x, approaching 9x, for products with exercise prices around 463-464 (out-of-the-money by about 8%), they offer competitive advantages with leverage exceeding 9x and premiums around 11%, with low implied volatility, making them more cost-effective.
Avoid choosing products with excessively high out-of-the-money percentages because call warrants (call wheels) suffer from time decay. If you misjudge the direction, losses could be greater. Moreover, if you buy out-of-the-money call warrants and the stock price falls, not only will the warrant price drop, but the out-of-the-money percentage will increase, leading to larger losses. Therefore, investors should take note and try to select products closer to the money. If market supply permits, in-the-money products can also be considered since they have better resilience against declines. $UB#HKEX RC2604A.C (56764.HK)$$BI-HKEX@EC2605A.C (23431.HK)$$JP#HKEX RC2805G.C (58414.HK)$

Yanzhou Energy (01171.HK): The trend has broken out strongly. Is the resistance at 11 significant?
Simon: Today's (the 7th) stock price movement of Yanzhou Energy is really quite ideal, with a strong upward surge and supported by trading volume. Compared to yesterday or the day before, the trading volume continues to hit new highs. However, it should be noted that the RSI indicator has reached a relatively high level, approximately 85.9, which everyone should pay attention to. Investors have asked whether Yanzhou Energy will have the opportunity to break through the key level of 11 yuan if this trend continues. Looking at the short-term resistance level, Yanzhou Energy’s resistance is around 11.2 yuan, and if it breaks through 11.2 yuan, it could rise to 11.5 yuan. To simply answer investors' questions, in the short term, Yanzhou Energy has the potential to break through 11 yuan. But it should also be noted that, based on a summary of technical signals, the current outlook is neutral with no clear direction, which is provided for your reference. $BIYKENR@EC2605A.C (17937.HK)$


AIA (01299.HK): Investors are asking if the stock price can reach 90. Holding call warrants with an exercise price of 91.71.
Simon: AIA (1299) didn't show significant changes today. For now, it remains consolidating at a high level. While the final closing price shows a slight decline, the drop isn't particularly noticeable, so to some extent, it is still maintaining a sideways trend. Some investors asked if AIA has a chance to rise to 90. Looking at resistance levels, the current resistance is around 89.1. If it breaks through, there’s a chance to exceed 90, even reaching 92.4. So, whether it can reach 90 depends first on breaking the 89.1 resistance level.
Many investors have purchased some call warrants with exercise prices around 91, which is an appropriate out-of-the-money percentage. Products with exercise prices around 91 or 92 have an out-of-the-money percentage of about 6%, not overly out-of-the-money. There are several choices available in this range. However, note that some products have slightly higher leverage, around 4.9x, and one should also check implied volatility. Implied volatility and premium are both important factors. Some products have lower premiums and implied volatilities. Although differences between products might be less than 10%, from an investor’s perspective, choosing products with higher leverage and relatively lower implied volatility and premium would be more beneficial. One last reminder: currently, AIA's technical signals are still primarily 'sell,' with more sell signals than buy signals, which is for your reference. $HS-AIA @EC2604A.C (29501.HK)$$UB#AIA RC2606F.C (59621.HK)$$BI-AIA @EC2604B.C (17336.HK)$


1. China Mobile (00941.HK): Investors are asking about the support level below. In the warrant market, some investors have taken bullish positions with a call price at HKD 74.5.
Simon: Remember that China Mobile’s stock price is relatively more volatile today. Based on the current closing price, it's around HKD 81.3. Although the rise and fall aren’t particularly large, you can see that its daily volatility is quite significant. Additionally, in today’s falling market, China Mobile’s trading volume has also increased. China Mobile has been down for three consecutive days, and the trading volume has risen for three consecutive days as well — this data point is worth noting. Investors are also asking what the current support level for China Mobile is. The current support level is approximately HKD 78.2; if it falls below that, it might drop to HKD 74.9 — something to keep in mind.

Some investors are considering buying bull warrants with a call price of around HKD 74.5. Though earlier calculations estimated the support level at roughly HKD 74.9, their judgment was fairly accurate, though I think it’s slightly risky since they’re buying too close to the price. If possible, products with a bit further call prices could be chosen. For instance, products with call prices further out still offer leverage of around 10x. Of course, closer-to-price products provide higher leverage, like 12x, 13x, or even 14x, but if you're looking for something slightly safer, products offering around 10x leverage are worth considering. It’s better than losing all your principal due to being called step by step, which wouldn’t be ideal. However, let me give you a data reference: based on the overall signal summary, China Mobile (0941) is still showing a “buy” signal predominantly. Therefore, the decision to buy bull warrants does have data backing it, but product selection needs more attention. $UB#C MOBRP2604B.P (56287.HK)$$CI-CMOB@EP2604A.P (21480.HK)$$BI-CMOB@EP2604A.P (21625.HK)$

1. Alibaba-W (09988.HK): Will it fall back to HKD 140? In the warrant market, investors are holding bullish warrants with a call price at HKD 140.
Simon: I believe many are paying close attention to these large-cap stocks. You can see that Alibaba dropped significantly today, and during the market decline, trading volume also increased. These figures can serve as references. In terms of support levels, it’s around HKD 142. If it breaks below that, there’s a chance it could fall below HKD 140 and possibly reach HKD 137.8. Some investors are buying bull warrants with call prices at around HKD 140. Honestly, a call price at HKD 140 is still somewhat close to the current price. Given the existing support level and market position, breaking below HKD 140 is indeed possible. So if you want a safer option, you could choose products with call prices at HKD 138 or lower. Suitable options do exist, such as products with call prices around HKD 135, offering leverage of about 10x. When choosing products, although Alibaba’s technical signals currently indicate a predominant “buy,” risk management remains important. Choosing products with call prices too close to the price often carries a higher risk of being called. Therefore, investors should, apart from considering leverage, also try to avoid known support or resistance levels when selecting products, aiming to minimize the risk of being called. $BIALIBA@EC2604B.C (20577.HK)$$UB#ALIBARC2607I.C (56413.HK)$


Alright, that’s all for today’s sharing. Thank you for listening. If you have any questions about individual stocks, feel free to leave us a message, and we’ll answer them for you. That’s all for today’s sharing. Thank you, everyone. Bye!
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 shall not be liable for any loss or damage arising from reliance on the information in this article. Technical analysis merely indicates whether certain technical conditions are met; a comprehensive evaluation of asset performance should incorporate additional data. Trading decisions should not be based solely on the content of this article. Please note that past performance is not indicative of future results.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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