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wrote a column · Jan 22 10:34

[Warrant Perspective] Hang Seng Index Short-term Support at 25,900; Analysis of Timing for High-leverage Bull and Bear Warrants

On January 21st, $Hang Seng Index (800000.HK)$
The index closed at 26,585.06 points, up 0.37% on the day, with a 5-day volatility of 3.2%, and a turnover of 250.451 billion yuan. From a technical indicator perspective, multiple oscillation indicators collectively gave 8 buy signals and 6 sell signals, with "buy" signals slightly dominating, indicating an overall positive bias.
On January 21st, $Hang Seng Index (800000.HK)$ The index closed at 26,585.06 points, up 0.37% on the day, with a 5-day volatility of 3.2%, and a turnover of 250.451 billion yuan. From a technical indicator perspective, multiple oscillation indicators collectively gave 8 buy signals and 6 sell signals, with "buy" signals slightly dominating, indicating an overall positive bias. In our 【HK Stock Broadcast】, we have commented that the short-term trend of the Hang Seng Index (HSI) is slightly positive based on data analysis. The support level is around 25,900 points. If you want to buy bullish warrants, choosing products with a recall price below 25,900 points would be relatively safe. You could even consider products closer to 25,600 points. Although these products may have slightly lower leverage, most products on the market at levels such as 25,600, 25,500, or even 25,400 points offer leverage ranging from 22x to 24x, which is not considered low. Moreover, if you can choose products with a farther recall price while maintaining similar leverage, their risk-avoidance capabilities are stronger, and the probability of directly profiting is higher, minimizing the risk of hitting the recall price. This is why we often use support levels, secondary support levels, or resistance levels as the basis for selecting products. Currently, the HSI’s first support level is at 25,965 points, the second support level at 25,659 points, with resistance levels at 27,036 points and 27,506 points. The short-term trading range is relatively clear. On January 21, blue-chip stocks showed mixed performance, with technology stocks performing slightly better, while most financial stocks softened. There were divergent signals from technical indicators...
In our 【HK Stock Broadcast】, we have commented that the short-term trend of the Hang Seng Index (HSI) is slightly positive based on data analysis. The support level is around 25,900 points. If you want to buy bullish warrants, choosing products with a recall price below 25,900 points would be relatively safe. You could even consider products closer to 25,600 points. Although these products may have slightly lower leverage, most products on the market at levels such as 25,600, 25,500, or even 25,400 points offer leverage ranging from 22x to 24x, which is not considered low. Moreover, if you can choose products with a farther recall price while maintaining similar leverage, their risk-avoidance capabilities are stronger, and the probability of directly profiting is higher, minimizing the risk of hitting the recall price. This is why we often use support levels, secondary support levels, or resistance levels as the basis for selecting products. Currently, the HSI’s first support level is at 25,965 points, the second support level at 25,659 points, with resistance levels at 27,036 points and 27,506 points. The short-term trading range is relatively clear.
On January 21, blue-chip stocks showed divergence in performance: tech stocks performed relatively well, while financial stocks mostly softened. Technical indicator signals displayed noticeable divisions and can be categorized into three types:
Strong buy signal stocks: Xiaomi Group (01810) closed at HKD 35.42, down 0.17% for the day, and below its MA10 and MA30 key moving averages. However, its RSI was only at 24, in oversold territory, with the Williams %R indicator signaling an oversold buy opportunity. The overall technical summary indicates a 'strong buy' signal, with high strength at 12, suggesting a strong expectation of a rebound from oversold conditions. Meituan (03690) and Sunny Optical (02382) also issued 'buy' signals. Meituan's RSI of 40 is slightly weak, but the Williams %R suggests oversold conditions, while Sunny Optical’s stock price rose close to MA10, with the CCI indicator hinting at bottom formation after overselling.
Mixed signal stocks: Stocks like Construction Bank (00939) and Hong Kong Exchange (00388) show conflicting indicator signals. Construction Bank closed at HKD 7.67, falling 1.16% for the day. While the moving average signal indicates a 'strong buy,' MACD gave a sell signal, reflecting insufficient short-term momentum. The Hong Kong Exchange closed at HKD 427.4, with the stock above its MA30. The oscillation indicator is neutral, but the moving average signal suggests selling, showing fierce tug-of-war between bulls and bears. AIA’s (01299) technical summary signal is 'neutral,' with significant divergence among various indicators, indicating cautious market sentiment.
Weaker signal stocks: HSBC Holdings (00005) and Ping An (02318) face relative pressure on the technical side. HSBC closed at HKD 128.2, with its RSI at 69, nearing overbought territory. The moving average signal indicates a 'strong sell,' showing substantial upside resistance. Ping An closed at HKD 68.5, below its MA10, with both Bollinger Bands and moving averages issuing sell signals, suggesting a weaker short-term trend.
Review and Highlights of Warrants & Bull-Bear Products: High-leverage products in focus
Reviewing the HSI structured products recommended on January 16—amid a two-day drop of 1.33% in the underlying stock, bearish warrants and put options posted good gains. UBS bear certificate (63330) surged 28% over two days, while BOC bear certificate (57148) rose 25%. In put options, BOC (21317) and UBS (21347) gained 13% and 11%, respectively, highlighting the hedging attributes of derivatives during market corrections.
Risk Warning: Warrants and callable bull/bear contracts carry strong leverage characteristics; returns and risks coexist, requiring strict position control.
Based on the current Hang Seng Index trend, two high-value products are selected for reference:
BOC Bull Certificate (63488), with a leverage of 24.2x and a recall price of 25,595 points, offers a relatively low premium and aligns with the HSI’s support level at 25,900 points, providing strong risk-avoidance capabilities. Meanwhile, BOC Bear Certificate (60082), with actual leverage of 24.8x and a recall price of 27,588 points, also has a low premium and suits investors concerned about upward resistance in the HSI. Both products have reasonable leverage levels, fitting the current market volatility rhythm.
If you want to deploy the Hang Seng Index, which would you prefer: A) Bottom-fishing for a rebound, choose bull contracts. B) Betting on a pullback from highs, choose bear contracts. C) Wait until the direction becomes clear before taking action.
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.
#HongKongStocks #HangSengIndex #RealTimeAnalysis #WarrantsSelection #WarrantsStrategy #DerivativesHedging #BlueChipStocks #TechStocks #FinancialStocks #TechnicalAnalysis
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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