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港股窩輪Jenny
commented on a stock · Mar 31 14:54

NetEase Technical Analysis: RSI drops to 37 with a bullish divergence, support at HKD 167.3 becomes the key for a rebound

As of March 31, NetEase (09999) $NTES-S (09999.HK)$ closed at HKD 170.3, down 1.33%, with a turnover of HKD 639 million. After consecutive days of adjustment, the stock has shown initial support near the HKD 170 level. From a technical perspective, the current price is significantly below the 10-day moving average (HKD 177.12), the 30-day moving average (HKD 180.71), and the 60-day moving average (HKD 194.78). The moving average system shows a bearish alignment, reflecting continued pressure on the medium-term trend. However, it is worth noting that technical indicators are showing clear divergence signals. Multiple oscillators such as the Stochastic Oscillator and the CCI indicator are issuing 'buy' signals; the Williams %R indicator is in oversold territory, and the RSI has dropped to 37, entering a weaker zone but not yet reaching extreme levels. Most importantly, the ROC indicator is showing bullish divergence, and the VR Volume Ratio indicator suggests 'oversold, possible bottoming, buy.' The overall technical summary signal is 'buy' with an intensity of 10. This divergence between trend indicators (MACD sell) and oscillators (buy) indicates that short-term rebound momentum is building after the sustained decline, though the medium-term structure remains weak.
In terms of key levels, the immediate support is at HKD 167.3, which represents the recent low area and serves as the first line of defense technically. If this level is breached, the next support lies at HKD 158.2, close to the 52-week low region, where stronger buying interest may emerge. On the upside, the first resistance level is HKD 179.3, near the 10-day moving average. A break above this could target HKD 186.5, around the 30-day moving average and the prior high during the recent pullback. The overall probability of an upward move is 53%, which is relatively high compared to other stocks, indicating that conditions for a technical rebound are relatively mature.
As of March 31, NetEase (09999) $NTES-S (09999.HK)$ closed at HKD 170.3, down 1.33%, with a turnover of HKD 639 million. After consecutive days of adjustment, the stock has shown initial support near the HKD 170 level. From a technical perspective, the current price is significantly below the 10-day moving average (HKD 177.12), the 30-day moving average (HKD 180.71), and the 60-day moving average (HKD 194.78). The moving average system shows a bearish alignment, reflecting continued pressure on the medium-term trend. However, it is worth noting that technical indicators are showing clear divergence signals. Multiple oscillators such as the Stochastic Oscillator and the CCI indicator are issuing 'buy' signals; the Williams %R indicator is in oversold territory, and the RSI has dropped to 37, entering a weaker zone but not yet reaching extreme levels. Most importantly, the ROC indicator is showing bullish divergence, and the VR Volume Ratio indicator suggests 'oversold, possible bottoming, buy.' The overall technical summary signal is 'buy' with an intensity of 10. This divergence between trend indicators (MACD sell) and oscillators (buy) indicates that short-term rebound momentum is building after the sustained decline, though the medium-term structure remains weak. In terms of key levels, the immediate support is at HKD 167.3, which represents the recent low area and serves as the first line of defense technically. If this level is breached, the next support lies at HKD 158.2, close to the 52-week low region, where stronger buying interest may emerge. ...
Reviewing the performance of warrant products, according to the product mentioned on March 25, despite a cumulative 1.82% drop in the underlying stock over the following two trading days (March 26-27), related put warrants still recorded positive returns. J.P. Morgan Put Warrant (24127) $JP-NTES@EP2608A.P (24127.HK)$ recorded a cumulative gain of 7% over two days, effectively capturing gains from the slight decline in the underlying stock. UBS Group Put Warrant (24274) $UB-NTES@EP2608A.P (24274.HK)$ The cumulative increase over the two days reached 5%, also recording stable returns. These two products demonstrated the effectiveness of put warrants as hedging tools in a scenario where the underlying stock was moving sideways with a slight downward bias.
As of March 31, NetEase (09999) $NTES-S (09999.HK)$ closed at HKD 170.3, down 1.33%, with a turnover of HKD 639 million. After consecutive days of adjustment, the stock has shown initial support near the HKD 170 level. From a technical perspective, the current price is significantly below the 10-day moving average (HKD 177.12), the 30-day moving average (HKD 180.71), and the 60-day moving average (HKD 194.78). The moving average system shows a bearish alignment, reflecting continued pressure on the medium-term trend. However, it is worth noting that technical indicators are showing clear divergence signals. Multiple oscillators such as the Stochastic Oscillator and the CCI indicator are issuing 'buy' signals; the Williams %R indicator is in oversold territory, and the RSI has dropped to 37, entering a weaker zone but not yet reaching extreme levels. Most importantly, the ROC indicator is showing bullish divergence, and the VR Volume Ratio indicator suggests 'oversold, possible bottoming, buy.' The overall technical summary signal is 'buy' with an intensity of 10. This divergence between trend indicators (MACD sell) and oscillators (buy) indicates that short-term rebound momentum is building after the sustained decline, though the medium-term structure remains weak. In terms of key levels, the immediate support is at HKD 167.3, which represents the recent low area and serves as the first line of defense technically. If this level is breached, the next support lies at HKD 158.2, close to the 52-week low region, where stronger buying interest may emerge. ...
In terms of product positioning, if investors believe that NetEase can hold steady above the support level of HK$167.3 and experience a technical rebound, they may consider the BNP Paribas call warrant (27799). $BP-NTES@EC2611A.C (27799.HK)$ This product has an exercise price of HK$202 and effective leverage of 3.6 times, offering the lowest premium among similar products, which helps to minimize the impact of time decay. This allows investors to focus more on the movement of the underlying stock price during the holding period. The exercise price is approximately 18% higher than the current underlying stock price, making it suitable for investors expecting the stock price to gradually advance towards resistance levels at HK$179.3 and HK$186.5 amid an oversold rebound. The leverage level of 3.6 times offers a moderate amplification effect on returns during mild rebounds in the underlying stock, while maintaining relatively controllable risks.
If investors expect NetEase’s rebound to be weak or believe the stock price will retest the lower support levels, they may consider the Macquarie put warrant (25654). $MS-NTES@EP2608A.P (25654.HK)$ This product has an exercise price of HK$186.9 and effective leverage of 3.3 times, again featuring the lowest premium among similar products. Its exercise price is about 9.2% higher than the current underlying stock price, qualifying it as an in-the-money put warrant with higher sensitivity to declines in the underlying stock. The product’s terms are designed for investors who anticipate NetEase will retest support levels at HK$167.3 or even HK$158.2 after a failed rebound. The low premium characteristic helps mitigate the impact of implied volatility fluctuations on the product's price.
For investors who prefer bull and bear certificates, they may consider two bull certificates to position for a rebound. The Societe Generale bull certificate (54038) $SG#JDCOMRC2705A.C (54058.HK)$ has a call price of HK$150.5, approximately 12.1% away from the current underlying stock price, providing a relatively high margin of safety, with effective leverage of 6.7 times – the highest actual leverage among similar products with low premium. This product is suitable for investors expecting the stock price to stabilize above HK$167.3 and begin a rebound; its higher leverage provides a more pronounced return amplification effect during a rebound. The UBS Group bull certificate (54539) $UB#NTES RC2612A.C (54539.HK)$ has a call price of HK$151 and effective leverage of 6.9 times, with the lowest premium among similar products, offering relatively high actual leverage. Both have close call prices, within the range of HK$150 to HK$151, significantly below the current support level of HK$167.3, thus presenting a relatively low risk of forced recall. It is suitable for investors looking to deploy a rebound with higher leverage. The low premium feature of the UBS Group bull certificate means that its price is less affected by market supply and demand fluctuations, resulting in pricing closer to intrinsic value.
As of March 31, NetEase (09999) $NTES-S (09999.HK)$ closed at HKD 170.3, down 1.33%, with a turnover of HKD 639 million. After consecutive days of adjustment, the stock has shown initial support near the HKD 170 level. From a technical perspective, the current price is significantly below the 10-day moving average (HKD 177.12), the 30-day moving average (HKD 180.71), and the 60-day moving average (HKD 194.78). The moving average system shows a bearish alignment, reflecting continued pressure on the medium-term trend. However, it is worth noting that technical indicators are showing clear divergence signals. Multiple oscillators such as the Stochastic Oscillator and the CCI indicator are issuing 'buy' signals; the Williams %R indicator is in oversold territory, and the RSI has dropped to 37, entering a weaker zone but not yet reaching extreme levels. Most importantly, the ROC indicator is showing bullish divergence, and the VR Volume Ratio indicator suggests 'oversold, possible bottoming, buy.' The overall technical summary signal is 'buy' with an intensity of 10. This divergence between trend indicators (MACD sell) and oscillators (buy) indicates that short-term rebound momentum is building after the sustained decline, though the medium-term structure remains weak. In terms of key levels, the immediate support is at HKD 167.3, which represents the recent low area and serves as the first line of defense technically. If this level is breached, the next support lies at HKD 158.2, close to the 52-week low region, where stronger buying interest may emerge. ...
It should be noted that although NetEase’s technical indicators currently show signs of bottom divergence and oversold signals, the medium-term trend has not yet reversed, with MACD and Bollinger Bands still indicating sell signals. The sustainability of a short-term rebound remains uncertain, and if the stock price fails to hold above HK$167.3, it would indicate insufficient rebound momentum, at which point the holding pressure on the aforementioned call warrants and bull certificates would notably increase. Investors should use HK$167.3 as a key observation point when deploying positions and strictly control their exposure.
Overall, NetEase is currently in a contradictory phase of being 'technically oversold but with a weak medium-term trend.' The short-term betting ratio has improved, and the ideal strategy would be to wait for confirmation of stabilization above HK$167.3 before cautiously deploying call warrants or bull certificates for a rebound, targeting an initial move towards HK$179.3. If the stock price fails to hold above HK$167.3, the rebound logic needs to be reassessed, and consideration could then be given to using put warrants as a hedge.
Interactive Q&A:
Do you think this technical rebound of NetEase can break through the resistance at 179.3 yuan?
A. It can break through, strong oversold signals will drive the rebound
B. Difficult to break through, weak mid-term trend will limit the upside
C. First, consolidate within the range of 167 to 179 yuan
Feel free to share your thoughts in the comments section.
Friendly reminder: This article does not constitute any investment advice. It is for reference only and does not constitute any form of investment recommendation. Market data, opinions, and analyses presented in this article may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information provided herein. Technical analysis shows only whether certain technical conditions are met; asset performance should be comprehensively evaluated using additional sources of information. Decisions to trade should not be made solely based on this article. Please note that past performance is not indicative of future results. Follow HK Stocks Warrants Jenny for more professional insights.
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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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