The approach of the peak travel season is catalyzing a rebound, with Ctrip call warrants seeing inflows for five consecutive days.

As of April 1, Ctrip (09961) closed at HKD 395.4, up 3.89%, with a turnover of HKD 476 million. The stock showed a moderate rebound after consecutive days of adjustment but remains significantly pressured by several key moving averages. From a technical perspective, the current price is below the 10-day line (HKD 393.26), the 30-day line (HKD 404.05), and the 60-day line (HKD 452.89). The moving average system shows a bearish alignment, indicating that the medium-term trend remains weak.

However, it is worth noting that technical indicators are showing clear divergence signals. Although trend-based indicators like MACD and Bollinger Bands still indicate 'sell,' multiple oscillation indicators have started to improve — RSI has rebounded to 41, which, while still in a weak region, has moved away from extreme lows; the VR volume ratio indicator shows 'buy,' and the bull-bear power indicator has also turned to 'buy,' reflecting an increase in buying support at lower levels. A comprehensive summary of technical indicators gives a 'buy' signal with a strength of 9. This divergence between trend indicators and oscillation indicators suggests that short-term rebound momentum is building after a sustained decline, though the medium-term structure has not yet fully reversed its weak pattern.

In terms of market news, recent fluctuations in Ctrip's stock price have mainly benefited from expectations of recovery in the travel industry and seasonal factors due to the upcoming Qingming Festival holiday. According to mainland media reports, as the Qingming short holiday approaches, tourism booking data shows a steady recovery in domestic and outbound travel demand. As a leader in online travel, Ctrip has shown signs of improvement in order volumes and customer spending. Additionally, market expectations for consumer recovery have risen, driving overall sentiment in the travel sector. In terms of sector performance, on April 1, Hong Kong-listed travel-related stocks generally rebounded, with Tongcheng Travel rising about 3.44%. Meituan’s store business benefited from travel demand, with its share price recording a slight rise.

From a key position analysis, immediate support below is at HKD 381, with further downside testing at HKD 364 if breached. Above resistance, the first level is at HKD 405, with a potential target of HKD 415 upon breakthrough. The overall probability of upward movement is 46%, indicating that although conditions exist for a short-term rebound, the pattern remains one of range-bound rebounds until the resistance at HKD 405 is broken.

Regarding warrant capital flows, according to the equity warrant capital flow report as of April 1, Ctrip has shown significant inflows over the past five trading sessions. The total inflow reached HKD 196.1 million, including HKD 107.6 million into call warrants and HKD 94.7 million into put warrants. Analyzing daily trends, call warrant inflows were more concentrated: HKD 6.2 million on March 30, HKD 52.5 million on March 27, HKD 27.5 million on March 26, HKD 17.7 million on March 25, and HKD 3.7 million on March 31, with inflows occurring for five consecutive trading days, reflecting overall bullish sentiment. By comparison, put warrant flows showed smaller fluctuations, with only a small outflow of HKD 2.7 million recorded on March 31, while other trading days saw minor inflows or small outflows, accumulating inflows of HKD 94.7 million. This capital flow structure indicates that market positioning for Ctrip is primarily through call warrants, with continuous inflows reflecting growing investor expectations of a rebound. Put warrant inflows were smaller and lacked persistence, indicating relatively limited bearish forces.

Reviewing the performance of warrant products, according to the products mentioned on March 27, within the subsequent two trading days (March 30 to 31), despite the underlying stock falling 2.61% cumulatively, BOC Put Warrant (25022) still recorded a 9% increase, effectively capturing gains from the slight decline in the underlying stock. This reflects that in a fluctuating market environment, appropriate use of put warrants can play a hedging or bearish role.

In terms of product deployment, if investors expect Trip.com to hold above the support level of HKD 381 and see a technical rebound, they can consider two call warrants. J.P. Morgan Call Warrant (27601). $JP-TRIP@EC2608A.C (27601.HK)$ The exercise price is HKD 517.11, with an effective leverage of 6.3 times, implied volatility of 48.84%, premium of 34.46%, and street leverage at only 0.54%. The exercise price of this product is about 32.7% higher than the current underlying stock price, making it a deeper out-of-the-money call warrant. It suits aggressive investors who anticipate the stock price breaking through resistance levels at HKD 405 and HKD 415 after rebounding and pushing higher. The lower street leverage indicates relatively dispersed market holdings, leading to less impact from potential supply-demand fluctuations.

UBS Group Call Warrant (27779) $UB-TRIP@EC2608A.C (27779.HK)$ The exercise price is HKD 517.11, with an effective leverage of 6.3 times, implied volatility of 48.97%, premium of 34.49%, and street leverage at 0%. This product has similar terms to J.P. Morgan's call warrant, with nearly identical effective leverage and exercise price, but zero street leverage, indicating no significant market holding yet. It suits investors looking to deploy a new product. A 6.3 times leverage offers a substantial profit amplification effect when the underlying stock rebounds, but due to the high exercise price, the stock would need a significant rise to move into the in-the-money state. Note the impact of time decay when deploying.

If investors believe Trip.com’s rebound will lack momentum or think the stock price will retest the lower support level, they can look at two put warrants. J.P. Morgan Put Warrant (26750). $JP-TRIP@EP2607A.P (26750.HK)$ The exercise price is HKD 318.688, with an effective leverage of 5.7 times, placing its leverage and implied volatility at relatively ideal levels. The exercise price of this product is about 18.2% lower than the current underlying stock price, making it an out-of-the-money put warrant. It is suitable for investors expecting the stock price to retreat after rebounding, testing support levels at HKD 381 or even HKD 364. A 5.7 times leverage provides moderate profit amplification during stock declines while keeping risks relatively controlled.

Morgan Put Warrant (25185) $MS-TRIP@EP2607A.P (25185.HK)$ The exercise price is HKD 318.8, with an effective leverage of 6 times, making it the lowest premium among similar products, with implied volatility and leverage both at relatively ideal levels. Its terms are similar to J.P. Morgan’s put warrant but with slightly higher effective leverage and lower premium, meaning the product price is less affected by time decay, allowing investors to focus more on changes in the underlying stock price during the holding period. A 6 times leverage suits investors expecting a steady downward push in the stock price, providing stable profit amplification during stock declines. The exercise prices of both put warrants are about 18% lower than the current stock price, maintaining some distance from the second support level at HKD 364, reflecting that the product design expects a significant drop in stock price before moving in-the-money.

It should be noted that although Trip.com’s technical indicators currently show divergence signals, the mid-term trend has not reversed, with MACD and Bollinger Bands maintaining sell signals and the moving average system showing a bearish alignment. The sustainability of the short-term rebound remains uncertain. If the stock price fails to hold the HKD 381 support, it indicates insufficient rebound momentum, which will significantly increase the holding pressure on the aforementioned call warrants. Investors should closely monitor HKD 381 as a key observation point and strictly control position sizes. Additionally, fund flow data shows that call warrants have seen inflows for five consecutive days, reflecting market consensus on a rebound. However, such consensus also means that if the rebound falls short of expectations, profit-taking pressure may arise.

Overall, Ctrip is in a conflicting phase of 'technical divergence rebound versus weak mid-term trend.' The short-term outlook suggests a higher probability of price fluctuations within the range of HKD 381 to HKD 405. An ideal strategy would be to wait for the stock price to clearly break above the resistance at HKD 405 or fall below the support at HKD 381 before making a move. If trading within this range, it is crucial to strictly control position size and set reasonable stop-loss levels.

Interactive Q&A:

Do you think Ctrip can stabilize above the HKD 381 support level in the short term and challenge the HKD 405 resistance?

A. It will rebound; the upcoming peak travel season and capital inflows will drive the stock price higher.

B. It will struggle to rebound; the weak mid-term trend will limit upward movement.

C. Consolidation through fluctuation in the range of HKD 380 to HKD 400 first.

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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