The Hang Seng Index has broken through the Bollinger Band. How should we grasp the short-term market rhythm?

The overall performance of Hong Kong stocks was subdued on the previous day (March 3), with blue-chip stocks seeing mixed gains and losses, mostly with small fluctuations. The market remained in a wait-and-see state. We provided commentary in our [Hong Kong Stock Broadcast]. $Hang Seng Index (800000.HK)$

: The downward trend continued from the previous day, with significant expansion in declines, closing at 25,768 points for the day.

From a technical perspective, the closing price has clearly broken below the lower band of the daily Bollinger Bands, while the Relative Strength Index (RSI) retreated to a recent low, marking its lowest level since December of last year. Notably, trading volume increased further compared to the previous day (March 2), indicating that selling pressure persisted during the decline, which is not an ideal signal.

Based on the data from that day, the key technical summary for the Hang Seng Index is as follows: Support levels are 25,438 points and 24,736 points (with 25,438 points being the short-term critical support corresponding to the lower boundary of the recent fluctuation zone); Resistance levels are 26,572 points and 27,633 points (with 26,572 points being the key resistance level for short-term rebounds). The overall technical signal is "neutral" with a strength of 9. The RSI is in the oversold zone but not extremely oversold. Trend indicators such as MACD and Bollinger Bands suggest selling bias. Short-term rebound momentum is insufficient, while downward momentum has weakened somewhat.

In terms of individual stocks, mainland bank stocks performed relatively strongly. Construction Bank (00939), ICBC (01398), and Bank of China (03988) rose by 2.19%, 1.57%, and 0.66%, respectively, supported by their robust fundamentals attracting risk-averse capital. Meanwhile, HSBC Holdings (00005), Tencent (00700), and Ping An (02318) experienced minor declines, with HSBC’s decline being relatively pronounced at 2.79% for the day.

Overall, the RSI for most blue-chip stocks is between 30 and 50, not yet in the extremely oversold region, but there is some room for a rebound correction, and the strong downward momentum may have weakened somewhat in the short term.

Review and selection recommendations for CBBCs (Callable Bull/Bear Contracts)

(1) CBBC Review:

Reviewing the previously recommended Warrants and Bull/Bear products, the Hang Seng Index BOC Bear Certificate (62755) mentioned on February 25, 2026, rose by 6% over two days, corresponding to a 0.51% decline in the underlying Hang Seng Index over the same period. The product's performance aligns with market trends. Investors are reminded that Warrant and Bull/Bear products are highly volatile, requiring constant attention to market changes.

(II) Warrant Product Selection:

Based on the trend of the Hang Seng Index and technical signals, two warrant products have been selected, focusing on varieties with controllable risks and superior indicators for investors' reference:

1. BOC Call Warrant (23126): Leverage of 14.9, exercise price of 26,733. Its core advantage lies in having the lowest premium and implied volatility, making costs relatively manageable. It is suitable for investors expecting a short-term rebound in the Hang Seng Index.

2. J.P. Morgan put warrant (23955): Leverage of 10, strike price 23600, with the lowest premium and implied volatility. The leverage is at a reasonable level, suitable for investors who anticipate a short-term weakness in the Hang Seng Index.

Friendly reminder: Warrants are derivatives with significant leverage effects; investors should choose based on their risk tolerance and operate cautiously.

Overall, the market is in a state of divergence; blindly chasing gains or cutting losses is not advisable. Prioritize stocks with clear technical signals and avoid those with conflicting signals.

Mainland bank stocks show relative short-term strength; focus on tracking their moving average trends and volume changes. If they can stabilize above MA10, there may be further room for a rebound.

The Hang Seng Index has fallen below the lower Bollinger Band; in the short term, attention should be paid to the support level at 25,438 points. If this position can be defended, a short-term rebound may occur; if it breaks down, further testing of the 24,736-point support level may follow.

The Hang Seng Index is weakening. Would you choose to add positions in Hang Seng Index warrants, hold cash and observe, or reduce positions? Feel free to share your insights in the comments section.

Reminder: 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 are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.

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