Akeso (09926): Stock price hits a three-month high, but overbought signals have emerged — to chase or not to chase?

On March 30, Akeso (09926) closed at HKD 133.3, surging 5.49%, with an intraday high of HKD 137, hitting a three-month high. Amid a collective rally in the innovative drug sector, this long bullish candlestick has made many investors eager to act. However, a closer look at the technical charts reveals a subtle contradiction: while the stock price has broken out strongly, both the Williams %R and Stochastic Oscillator indicators are flashing 'overbought, sell signal,' and the CCI indicator also suggests overbought conditions. Is this combination of new price highs and overbought signals a confirmation of a strong breakout or a precursor to a short-term overheating correction?

From a technical perspective, this uptrend in Akeso has indeed been fierce. The stock price has successfully moved above all short- and medium-term moving averages — the 10-day line (HKD 120.86), 30-day line (HKD 111.34), and 60-day line (HKD 112.64) are far below, with the moving averages showing a bullish alignment. The RSI rose to 63, entering a relatively strong range, reflecting robust buying momentum. However, here's the issue: multiple oscillators are simultaneously indicating overbought conditions, with both the Williams %R and Stochastic Oscillator issuing 'overbought, sell signal,' and the CCI indicator also being in the overbought zone. The overall technical system is signaling 'sell' with a strength of 8, creating a clear divergence from the strong price action. In simple terms, prices are still rising, but the risk of chasing the uptrend in the short term is rapidly accumulating.

In terms of key levels, initial support is seen at HKD 118 (recent breakout platform); if it fails, a retest of HKD 109.1 is likely. Resistance above lies in the HKD 143.6 to HKD 152.8 range. In my view, HKD 118 is currently the most critical short-term pivot point — this level represents both the area where previous funds were concentrated and the starting point of this uptrend. If it holds, the strong trend remains intact; if it doesn't, an overbought correction will be hard to avoid.

Market news on March 30 showed that most innovative drug concept stocks in Hong Kong gained, led by Akeso, with RemeGen rising over 5%, and Norvatis Oncology and Hutchison China MediTech increasing over 4%. On the news front, in the first three months of the year, the total value of outbound licensing deals for innovative drugs in China exceeded USD 60 billion, close to half of the full-year figure for 2025; as of March 27, 10 innovative drugs had been approved this year, eight of which were domestically produced, marking a historic breakthrough for China’s innovative drugs. Additionally, more than 70 biopharmaceutical companies released their 2025 earnings, with nearly 90% reporting profits, and seven companies seeing their earnings increase more than twofold.

Within the same sector, the Hang Seng Hong Kong Connect Pharmaceuticals & Biotechnology Index closed today at 2,165.59 points, down slightly by 0.71%, but innovative drug concept stocks generally outperformed the broader market. Brokerage opinions noted that Leung Nga Ho pointed out Akeso is one of the securities with the highest speculative value in the short and ultra-short term, serving as a reference for buying related call warrants or bull contracts. Phillip Huang Wai Kit gave a target price of HKD 140 and a stop-loss price of HKD 116, commenting that Akeso has a rich pipeline with multiple products already included in the national medical insurance directory. Macquarie also mentioned in today's warrant column that Akeso surged 6.7% midday to hit a three-month high, suggesting those who are bullish may want to keep an eye on related call warrants.

In terms of product deployment, I will focus on two different risk-preference strategies. If the stock price can stabilize above 118 yuan and continue to rise, the Societe Generale call warrant (25883) $MB-CMOB@EC2608A.C (25583.HK)$is worth noting. Its exercise price is 131.36 yuan with the lowest premium, and both implied volatility and leverage are relatively ideal. It is suitable for investors expecting the stock price to break through the resistance level of 143.6 yuan.

If you are more confident in a market breakout, you may consider UBS Group's call warrant (22037) $UBAKESO@EC2605A.C (22037.HK)$, with an exercise price of 163.76 yuan and effective leverage of 7.94 times, the highest in the table. The street leverage ratio is 0%, and it surged by 50% yesterday. This is suitable for aggressive investors seeking high leverage.

For investors who prefer bull contracts, they may consider products with a distant recall price to reduce the recall risk. If bearish or looking to hedge holding risks, you may pay attention to UBS Group’s bear contract (59485) $UB#AKESORP2812B.P (59485.HK)$, with a recall price of 150 yuan and the lowest premium. It is suitable for investors expecting the stock price to face resistance and retreat in the range between 143.6 yuan and 150 yuan.

It should be noted that although the sentiment in the innovative drug sector is positive, short-term technical indicators for Akeso Inc. have entered the overbought zone. If the stock price falls below 118 yuan, it would indicate that the foundation of this rally is beginning to waver, and the pricing pressure on the aforementioned call warrants will significantly increase—especially for UBS Group’s high-leverage call warrant (22037), which could see a more violent pullback. Simply put, 118 yuan is the baseline of this strong trend. If it holds, there’s still a chance to challenge 143.6 yuan; if it doesn’t hold, one must face the overbought correction.

Interactive Questions

Akeso Inc.'s share price has hit a three-month high, but its technical indicators have entered the overbought region – how long do you think this uptrend will last? Would you choose to deploy call warrants at the current level, or wait for a pullback to 118 yuan to confirm support before making a move? Feel free to share your thoughts in the comments section.

Disclaimer: This article does not constitute any investment advice. It is for reference only and does not constitute investment advice. Market data, opinions, and analysis presented may change at any time without prior notice. We are not responsible for any loss or damage resulting from reliance on the information provided in this article. Technical analysis only indicates whether certain technical conditions are met; asset performance should be assessed comprehensively using other materials. Trading decisions should not be based solely on this article. Please note that past performance is not indicative of future results. Follow Jenny's Hong Kong Warrants for more professional insights.

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