[Warrant Perspective] The trading range of Hang Seng Index remains unchanged, leverage effect of warrant bull certificates becomes evident

January 15th $Hang Seng Index (800000.HK)$

The closing price for the day was 26,923.62 points, with a slight drop of 0.28%. The 5-day volatility narrowed to 4.1%, with prices hovering around the midpoint of the core range between Support 1 (26,259 points) and Resistance 1 (27,273 points), showing obvious 'bull-bear deadlock' characteristics on the technical side.

From the perspective of combined technical indicators, the divergence of market signals is currently at a high level:

Trend indicators: MACD signal indicates buy, Bollinger Bands also give a buy signal, and Ichimoku Cloud provides a buy guidance, reflecting that the medium-term trend still has rebound potential;

Oscillation indicators: Williams %R and Stochastic Oscillator have entered the overbought zone and issued sell signals, while the RSI indicator recorded 66, which is at the 'critical point of the strong zone'. The Psychological Line indicator remains neutral, indicating accumulating short-term profit-taking pressure.

Strength rating: The summary signal from technical indicators is 'sell', but with an intensity of only 11, which falls under the 'weak sell' category, providing limited guidance for future trends.

Key points to watch for the future market: The level at 26,259 is a strong short-term support. This position overlaps with the MA30 (25,992.6 points) technical support zone; if it holds on a pullback, the logic of upward volatility remains intact. The level at 27,273 is a strong resistance point that requires a surge in trading volume to confirm the start of a trend reversal.

On January 15th, there was clear technical divergence among key blue-chip stocks. HSBC Holdings (00005) and HKEX (00388) stock prices stabilized above the three moving averages, but the RSI entered the overbought zone, indicating potential pullback pressure. China Mobile’s (00941) RSI is only at 27, nearing the oversold edge, sending out a buy signal technically. Sunny Optical (02382) led the daily gains and stabilized above the MA10, showing sufficient rebound momentum. Although Alibaba (09988) is above the moving average, it experienced a significant one-day drop with a 'strong sell' technical signal, facing heavy selling pressure. Other individual stocks are mostly within the entangled moving average range, giving neutral technical signals, so further observation is needed for directional choices.

Product Review: Against the backdrop of a modest 0.28% rise in the Hang Seng Index, the tracked Hang Seng Index Warrants and Bull/Bear Contracts on January 13 achieved returns far surpassing those of the underlying stocks due to leverage, fully demonstrating the 'high-risk, high-reward' characteristic of derivatives.

(1) Bull Contracts: Leverage effect prominent, highest return reached 17%

BOC Bull Certificate (68840): Daily increase of 17%, becoming today's top gainer. The product's recovery price is 25,950 points, which is close to the first support level of Hang Seng Index at 26,259 points, making it a 'near-price bull certificate' with higher price elasticity during minor fluctuations of the underlying stock.

BOC Bull Certificate (64765): Daily increase of 12%, recovery price at 25,895 points, also a near-price product, showing similarly impressive returns.

(2) Subscription warrant products: Stable returns suitable for conservative investors

BOC Warrant (23128): Daily increase of 6%, actual leverage of 11.8 times, exercise price at 28,341 points, closely matching the first resistance level of Hang Seng Index at 27,273 points.

UBS Group Warrant (23091): Daily increase of 5%, actual leverage of 11.6 times, exercise price also at 28,341 points. Both products have low premiums, offering high cost-effectiveness.

Risk Warning: Callable Bull/Bear Certificates are high-leverage derivatives, with price fluctuations far exceeding those of the underlying stock. They carry the risk of expiring worthless or being forcibly redeemed. Investors should strictly control their positions and avoid full-position operations.

Considering the current 'range-bound fluctuation' technical pattern of the Hang Seng Index, two products matching different trading strategies have been selected from the product pool for investors’ reference:

(1) Bullish Strategy Target: BOC Warrant (23128)

Product attributes: Actual leverage 11.8 times, exercise price at 28,341 points, relatively low premium;

Strategy alignment: The current resistance level for the Hang Seng Index is 27,273 points. If the market breaks through this level with higher volume, it may move towards 28,341 points. This product's exercise price has high alignment with the potential target, offering excellent cost-performance.

(2) Bearish Strategy Target: BOC Bear Certificate (57148)

Product attributes: Actual leverage 26.7 times, recall price at 27,888 points, with the lowest premium among similar products;

Strategy alignment: If the Hang Seng Index fails to break through the resistance level at 27,273 points, it will likely retest the support level at 26,259 points. This product offers relatively high actual leverage and exhibits greater profit elasticity when the underlying stock declines.

Do you think the Hang Seng Index will first test resistance at 27,273 points or first retrace to support at 26,259 points? Among the blue-chip stocks, do you favor China Mobile, which is nearing oversold levels, or HSBC Holdings, which is within the overbought range? Feel free to share your unique insights in the comments section.

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 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.

#Hang Seng Index #Hong Kong Stocks #Real-time Analysis #Warrants Selection #Warrants Strategy #Derivatives Hedging #Tencent Holdings #Fintech Sector #Technical Analysis

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