[Warrant Perspective] Baidu retreated nearly 2% in early trading; the key to future performance lies in whether it can hold steady above the moving averages.

On January 19th, $Hang Seng Index (800000.HK)$ Against the backdrop of overall market weakness, $BIDU-SW (09888.HK)$

Baidu demonstrated independent price action, rising 1.24% in a single day and closing at 147.4 yuan. During the session, the stock price broke through the 150-yuan mark, with trading volume reaching 1.541 billion yuan, higher than last Friday (the 16th), indicating strong market attention.

We 【HK Stock Report】January 19 [Hong Kong Stock Podcast] Hang Seng Index, Zijin Mining, BYD, Baidu Group, HSBCAnalysts have also commented on Baidu: Market investors remain generally optimistic about Baidu's subsequent performance, but caution has emerged in the derivatives market, with some investors beginning to consider positioning in put warrant products. The number of sell signals from yesterday (the 19th) was notably higher, providing technical support for positioning in put warrants. $ZHAOJIN MINING (01818.HK)$$ZIJIN MINING (02899.HK)$$BYD COMPANY (01211.HK)$$HSBC HOLDINGS (00005.HK)$

From a technical indicator perspective, Baidu is currently in a somewhat contradictory state. On one hand, the stock price remains strong, trading above the MA10 (144.01 yuan), MA30 (130.52 yuan), and MA60 (124.33 yuan) moving averages, and the short-term upward trend remains intact. On the other hand, overbought signals are appearing frequently, with the RSI index reaching 69, close to the overbought threshold. Additionally, indicators such as the Williams %R and stochastic oscillators are signaling overbought conditions, while the momentum oscillator suggests a top divergence, further reinforcing sell signals.

In stark contrast to Baidu, most other leading Chinese internet technology stocks weakened on January 19, with technical signals showing divergent trends:

$BABA-W (09988.HK)$ : Dropped 3.49% in a single day, closing at 160.4 yuan, with the overall technical signal indicating a sell (strength 8), RSI at 61, and the stock price below both MA10 and MA30, showing clear weakness.

$TENCENT (00700.HK)$ : Fell 1.21% to close at 610 yuan; despite stock price volatility, the technical signals leaned positive, with the overall signal suggesting a buy (strength 10). Multiple oscillation indicators were in oversold territory, signaling a buying opportunity.

$MEITUAN-W (03690.HK)$ 、 $JD-SW (09618.HK)$ : Each dropped by 1.50% and 1.14%, respectively, with both stocks' RSI at 44, relatively low, and overall technical signals for both suggesting buys. JD.com’s buy strength was particularly high at 11, indicating it may be entering a bottoming-out phase.

$NTES-S (09999.HK)$ : Rose slightly against the trend by 0.28%, closing at 216.2 yuan, with mixed neutral and buy technical signals, resulting in an overall evaluation of a buy (strength 10).

Overall, on January 19, the market implemented differentiated allocation strategies for the internet sector, contrasting Baidu's strong performance with the general weakness of most individual stocks, while technical signals presented a “one sell, multiple buys” pattern.

As of 11:38 AM today (January 20), Baidu's latest price was 144.4 yuan, temporarily down 2.04%. In terms of support,The first support level is at 136.7 yuan, and the second support level is at 127.4 yuan. If the stock price falls back, these two positions’ defensive strength will need close attention. The short-term resistance level is at 151.9 yuan, and if successfully broken through, the subsequent target would be 164.9 yuan, which bullish investors can use as a reference.

Review and Selection of Warrants and Bull/Bear Contracts

(1) Review of Previous Products

Looking back at the Baidu-related warrant products recommended on January 15, both products achieved positive returns and outperformed the underlying stock: $HS#BAIDURC2608B.C (65568.HK)$ A 5% increase after two days, $MSBAIDU@EC2606A.C (20760.HK)$ A 6% increase after two days, while the underlying Baidu stock only rose by 0.82% during the same period, highlighting the leverage effect.

(II) Today's Product Highlights

Based on the current technical aspects and market sentiment, two Baidu-related warrant products have been selected for investors' reference:

1. $MSBAIDU@EC2603C.C (21055.HK)$ : Actual leverage of 7.3 times, exercise price of HK$166.1. The key advantage lies in the lowest premium level with relatively high leverage, suitable for investors expecting Baidu to break through the resistance level, offering an opportunity to bet on a rise towards the target price of HK$164.9.

2. $BIBAIDU@EP2607B.P (24326.HK)$ : Actual leverage of 3.3 times, exercise price of HK$131.7. The leverage is relatively high among put warrants, with a lower premium, aligning with the current technical bias towards bearish sentiment and significant overbought pressure, making it suitable for investors anticipating a pullback in the stock price.

Risk Warning:Warrant products are characterized by high leverage and high risk; implied volatility and time decay will affect product performance. Investors should control their positions and participate cautiously.

Do you think Baidu can break through the resistance level at HK$151.9? A. Yes, the uptrend continues; B. No, a pullback from overbought conditions. With current divergence in internet stocks, would you prefer to position in Baidu or in stocks like Tencent and JD.com that are showing buy signals?Share your thoughts in the comments section. Want more analysis? Be sure to follow 'HK Warrants Jenny' for daily updates!

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.

#Hong Kong Stocks #Real-time Analysis #Warrants Selection #Warrants Strategy #Derivatives Hedging #Hong Kong Stocks Warrants Jenny #Baidu #Internet Tech Stocks #Technical Analysis

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