CATL's multiple volatility indicators are showing weakness, increasing pressure for a pullback from high levels.

Last Friday (March 20), $CATL (03750.HK)$

The stock closed at 698 yuan, up 8.39% in a single day, with a trading volume of 4.288 billion yuan, showing an extremely strong technical pattern. The moving averages are arranged in a strong upward trend, and the closing price is much higher than MA10 (619.4 yuan), MA30 (546.14 yuan), and MA60 (518.96 yuan). The RSI rose to 80, entering the severely overbought region. Technical indicators signal a sell, with a signal strength of 8, forming a typical 'price rise, weak signal' top divergence.

We 【Hong Kong Stock Report】March 20th [Hong Kong Stock Podcast] Part 2 - Sands China, Geely Auto, CATLThere are also comments on CATL: After the stock price rebounded from the low of 457 yuan, the recent trend has further entered an accelerated uptrend phase, not only continuously pushing higher highs and higher lows but also clearly stabilizing above multiple short- and medium-term moving averages, indicating a strong upward structure overall. Recently, it even reached 698 yuan, very close to the key psychological level of 700 yuan, reflecting clear bullish market sentiment. However, the RSI has risen above 80, indicating that the short-term trend is in an overheated zone, suggesting that while the upward momentum is strong, it is also starting to accumulate pressure for volatility at high levels. $SANDS CHINA LTD (01928.HK)$$GEELY AUTO (00175.HK)$

From the price structure perspective, 650 yuan has become an important support level in this upward trend and is also the key defensive position following the recent breakout. As long as the stock price does not significantly break below this level, the strong pattern remains intact. On the resistance side, 700 yuan represents the first major psychological threshold. If it can effectively break through and stabilize above this level, the next target could extend to 720 yuan or even higher areas. In other words, at this stage, there is still potential for further upside, but the situation has gradually shifted from a smooth rise from lower levels to challenging resistance at higher levels.

Regarding short-term value betting, if using 650 yuan as a defensive base to challenge upward towards 700-720 yuan, there is theoretically still room for extension. However, since the closing price is already close to the first resistance level, entering now is no longer ideal. The biggest variable at this point is not whether the trend will weaken, but whether new funds will emerge to support the market after breaking through the high levels. If the price fails to effectively break through 700 yuan, a short-term consolidation or even a pullback is more likely to occur. Therefore, while the current value betting ratio remains positive, it is less attractive compared to the early stages of the uptrend.

On March 20, regarding other key peer stocks:

1、 $BYD COMPANY (01211.HK)$ : Closing price at 103.8 yuan, up 0.58% in a single day, closing price above all major moving averages, RSI at 63 entering a moderately strong range, technical signal neutral, signal strength 8, may face consolidation in the short term;

2、 $GANFENGLITHIUM (01772.HK)$ : Closing price at 58.4 yuan, up 5.13% in a single day, closing price below MA10 and MA30 but above MA60, RSI at 42 moderately weak, technical signal buy, signal strength 10, rebound momentum is relatively sufficient;

3、 $LI AUTO-W (02015.HK)$ : Closing price at 66.8 yuan, up 1.21% in a single day, closing price slightly below MA10 and MA30 but close to MA60, RSI at 47 neutral, technical signal buy, signal strength 10, adjustment pressure has gradually eased;

4、 $XPENG-W (09868.HK)$ : Closing price at 71.6 yuan, down 5.10% in a single day, closing price below MA10 and MA60 but slightly above MA30, RSI at 50 neutral, technical signal buy, signal strength 9, conditions for a rebound exist after the decline;

5、 $NIO-SW (09866.HK)$ : Closing price at 46.52 yuan, down 1.32% in a single day, closing price above all major moving averages, RSI at 69 entering overbought territory, technical signal sell, signal strength 10, short-term facing pullback pressure.

III. Review and Selection of Warrants and Bull/Bear Contracts

Previous review:

The CATL-related warrants and bull contracts recommended on March 18 performed well, with $JP#CATL RC2609D.C (57968.HK)$ a two-day increase of 18%, $UB-CATL@EC2605A.C (22841.HK)$ a two-day increase of 16%, $HS#CATL RC2611C.C (58710.HK)$ a two-day increase of 15%, $BI-CATL@EC2609A.C (13229.HK)$The two-day increase of 13% has risen in tandem with the underlying stock, providing investors with solid swing trading returns.

Product Picks:

By analyzing the technical trends of CATL and its sector, we have selected two warrant products that align with the current market rhythm, focusing on CATL as the underlying asset while balancing flexibility and risk control:

1、 $BI-CATL@EC2704A.C (27275.HK)$: Leverage of 3.3x, strike price of 830, with the lowest premium and implied volatility, suitable for investors who are optimistic about CATL's long-term strength and seek steady swing trading returns;

2、 $HS#CATL RC2610C.C (60431.HK)$: Leverage of 11.1x, knock-out price of 600, with the lowest premium and relatively higher actual leverage, fitting CATL’s strong trend, offering high flexibility for swing trading.

Risk Warning: Warrants are derivatives with significant leverage effects; investors should choose based on their own risk tolerance, manage positions reasonably, and trade cautiously.

Among new energy stocks, which short-term trend do you favor more: CATL, BYD, or Ganfeng? Feel free to share your insights in the comments section.

For more market analysis, stay tuned to Jenny's daily updates on 'Hong Kong 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.

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