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港股窩輪Jenny
wrote a column · Mar 10 14:24

Is Cathay's 4% rise before earnings a rebound or a trend reversal?

International oil prices have retreated, and airline stocks have generally rebounded. Among them, the stock that will announce its earnings tomorrow (March 11)... $CATHAY PAC AIR (00293.HK)$ ...saw its share price rise sharply today, surging nearly 6% at one point to reach a high of HKD 12.89. The latest quote is HKD 12.68, up by 4.11%.
From the perspective of the moving average system, although today’s bullish candle temporarily lifted the share price out of its recent adjustment low, the overall weak pattern has not yet reversed. The current share price remains below the 10-day moving average of HKD 13.12 and the 30-day moving average of HKD 12.81, barely holding above the 60-day moving average of HKD 12.57. The three short-term moving averages are still arranged in a downward trend. If the share price fails to quickly break through and stabilize above the 30-day and 10-day lines, the moving average system will pose continuous resistance to any rebound. At present, the movement can only be defined as a technical recovery after a deep decline driven by news stimulation.
On the technical indicator level, there is a divergence between 'short-term momentum recovery' and an unclear mid-term trend. Multiple oscillation indicators have simultaneously issued signals of short-term strength; the Stochastic Oscillator crossed upward from the oversold region, sending a clear buy signal indicating that short-term downside momentum has been largely exhausted. The CCI indicator also turned positive during the same period, issuing another buy signal, confirming that the momentum for the share price to exit the extremely weak zone is accumulating. However, trend indicators have not yet shown a reversal signal. The ADX indicator is currently below 20, reflecting that the market has yet to form a strong trend, while the MACD indicator remains in sell mode, implying that the medium-term adjustment pattern has not yet confirmed its end, and the sustainability of the rebound remains to be verified.
The key levels are as follows: the first support level 1 is at HK$12.20, and support level 2 is located at HK$11.20. Above, resistance level 1 is at HK$13.40, where short-term moving averages converge with a previous small consolidation area; if it can break through, the next key resistance level 2 will be around the HK$14.00 mark.
International oil prices have retreated, and airline stocks have generally rebounded. Among them, the stock that will announce its earnings tomorrow (March 11)... $CATHAY PAC AIR (00293.HK)$ ...saw its share price rise sharply today, surging nearly 6% at one point to reach a high of HKD 12.89. The latest quote is HKD 12.68, up by 4.11%. From the perspective of the moving average system, although today’s bullish candle temporarily lifted the share price out of its recent adjustment low, the overall weak pattern has not yet reversed. The current share price remains below the 10-day moving average of HKD 13.12 and the 30-day moving average of HKD 12.81, barely holding above the 60-day moving average of HKD 12.57. The three short-term moving averages are still arranged in a downward trend. If the share price fails to quickly break through and stabilize above the 30-day and 10-day lines, the moving average system will pose continuous resistance to any rebound. At present, the movement can only be defined as a technical recovery after a deep decline driven by news stimulation. On the technical indicator level, there is a divergence between 'short-term momentum recovery' and an unclear mid-term trend. Multiple oscillation indicators have simultaneously issued signals of short-term strength; the Stochastic Oscillator crossed upward from the oversold region, sending a clear buy signal indicating that short-term downside momentum has been largely exhausted. The CCI indicator also turned positive during the same period, issuing another buy signal, confirming that the momentum for the share price to exit the extremely weak zone is accumulating. However, trend indicators have not yet shown a reversal signal. The ADX indicator is currently below 20, reflecting that the market has yet to form a strong trend, while the MACD indicator remains in sell mode, implying that the medium-term adjustment pattern has not yet confirmed its end, and the sustainability of the rebound remains to be verified.
International oil prices have retreated, and airline stocks have generally rebounded. Among them, the stock that will announce its earnings tomorrow (March 11)... $CATHAY PAC AIR (00293.HK)$ ...saw its share price rise sharply today, surging nearly 6% at one point to reach a high of HKD 12.89. The latest quote is HKD 12.68, up by 4.11%. From the perspective of the moving average system, although today’s bullish candle temporarily lifted the share price out of its recent adjustment low, the overall weak pattern has not yet reversed. The current share price remains below the 10-day moving average of HKD 13.12 and the 30-day moving average of HKD 12.81, barely holding above the 60-day moving average of HKD 12.57. The three short-term moving averages are still arranged in a downward trend. If the share price fails to quickly break through and stabilize above the 30-day and 10-day lines, the moving average system will pose continuous resistance to any rebound. At present, the movement can only be defined as a technical recovery after a deep decline driven by news stimulation. On the technical indicator level, there is a divergence between 'short-term momentum recovery' and an unclear mid-term trend. Multiple oscillation indicators have simultaneously issued signals of short-term strength; the Stochastic Oscillator crossed upward from the oversold region, sending a clear buy signal indicating that short-term downside momentum has been largely exhausted. The CCI indicator also turned positive during the same period, issuing another buy signal, confirming that the momentum for the share price to exit the extremely weak zone is accumulating. However, trend indicators have not yet shown a reversal signal. The ADX indicator is currently below 20, reflecting that the market has yet to form a strong trend, while the MACD indicator remains in sell mode, implying that the medium-term adjustment pattern has not yet confirmed its end, and the sustainability of the rebound remains to be verified.
Overall, Cathay Pacific is currently in a critical observation window ahead of its earnings announcement. The expected improvement in costs due to falling oil prices provides a short-term catalyst for the stock price, while the strengthening of multiple short-term indicators supports further upward testing of resistance. However, signals of a strengthened mid-term trend have yet to be confirmed. For professional investors, consider using HK$12.20 as a short-term risk defense point and pay attention to changes in trading volume after the earnings announcement. If the stock price can rise above HK$13.40 on higher-than-average volume and stabilize, then the rebound potential could expand further; if earnings disappoint market expectations or fail to break through resistance after rallying, the stock price will likely return to the consolidation range and retest lower support areas for consolidation.
Analysis of Changes in Open Interest for Cathay Pacific Derivative Products
The open interest trends for Cathay Pacific call warrants and put warrants show significant divergence, reflecting notable shifts in market expectations regarding the stock's future movements. The open interest for call warrants has risen continuously over three statistical days, reaching 97.19 million units on March 5, increasing to 102.01 million units on March 6 (a sequential increase of about 4.96%), and further rising to 104.83 million units on March 9, marking a cumulative increase of 7.86% over three trading days. This indicates that bullish funds continue to position themselves in relevant call products, and market optimism towards Cathay Pacific’s future performance is gradually growing.
In stark contrast, the movement in open interest for put warrants shows unusual fluctuations. Between March 5 and March 6, open interest for put warrants also increased from 7.48 million units to 8.18 million units (a sequential increase of approximately 9.36%), reflecting some funds still positioning in bearish instruments in the short term, indicating some market expectation divergence. However, on March 9, open interest for put warrants plummeted to 2.49 million units, a sharp decline of about 69.56% compared to March 6 levels, nearly returning to previous lows, showing that bearish funds exited rapidly.
Product Picks:
Regarding call warrants, one may first consider $HSCPAIR@EC2605A.C (29670.HK)$ , with a strike price of HK$12.95. This CBBC has the lowest premium among similar products currently available, and both implied volatility and leverage levels are relatively ideal, offering balanced overall conditions. It suits investors who are optimistic about Cathay Pacific’s future but want to control costs. Another one worth noting is $SGCPAIR@EC2611A.C (15699.HK)$ , with a strike price of HK$12.52. Its leverage and implied volatility are quite favorable, providing effective amplified return potential, making it suitable for investors confident in the stock’s upward movement. As for bearish positions, consider $JPCPAIR@EP2609A.P (23541.HK)$ , with a strike price of HK$10.20. This CBBC has the highest leverage, enhancing the efficiency of hedging or bearish investments, and is suitable for anticipating stock price adjustments.
International oil prices have retreated, and airline stocks have generally rebounded. Among them, the stock that will announce its earnings tomorrow (March 11)... $CATHAY PAC AIR (00293.HK)$ ...saw its share price rise sharply today, surging nearly 6% at one point to reach a high of HKD 12.89. The latest quote is HKD 12.68, up by 4.11%. From the perspective of the moving average system, although today’s bullish candle temporarily lifted the share price out of its recent adjustment low, the overall weak pattern has not yet reversed. The current share price remains below the 10-day moving average of HKD 13.12 and the 30-day moving average of HKD 12.81, barely holding above the 60-day moving average of HKD 12.57. The three short-term moving averages are still arranged in a downward trend. If the share price fails to quickly break through and stabilize above the 30-day and 10-day lines, the moving average system will pose continuous resistance to any rebound. At present, the movement can only be defined as a technical recovery after a deep decline driven by news stimulation. On the technical indicator level, there is a divergence between 'short-term momentum recovery' and an unclear mid-term trend. Multiple oscillation indicators have simultaneously issued signals of short-term strength; the Stochastic Oscillator crossed upward from the oversold region, sending a clear buy signal indicating that short-term downside momentum has been largely exhausted. The CCI indicator also turned positive during the same period, issuing another buy signal, confirming that the momentum for the share price to exit the extremely weak zone is accumulating. However, trend indicators have not yet shown a reversal signal. The ADX indicator is currently below 20, reflecting that the market has yet to form a strong trend, while the MACD indicator remains in sell mode, implying that the medium-term adjustment pattern has not yet confirmed its end, and the sustainability of the rebound remains to be verified.
Do you think Cathay Pacific's current rebound is a flash in the pan or the beginning of a technical rally before earnings? Feel free to share your insights in the comments section. For more market analysis, stay tuned to Jenny's daily updates on 'HK Stock Warrants'!
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.
#HK Stocks #HangSengIndex #RealTimeAnalysis #WarrantPicks #WarrantStrategy #DerivativesHedging #HKWarrantsJenny #AviationStocks #CathayPacific #00293 $Hang Seng Index (800000.HK)$$Crude Oil Futures (JUL6) (CLmain.US)$$Crude Oil Product (LIST2721.US)$
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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