April 1st [HK Stocks Podcast] Part 2 - RemeGen, Nio, China Eastern Airlines

4. RemeGen (09995.HK): Investors are asking if it’s too high to enter now? With a surge in volume and price, can it break through the previous peak of HKD 126.6? Pay attention to the call warrant with an exercise price of HKD 120.99.

RemeGen is currently trading at HKD 110.4, having rebounded repeatedly from a recent low of HKD 69.7, and has now approached the short-term high of HKD 111.5. Observing this upward wave as the main range, it can be viewed as fluctuating between HKD 69.7 and HKD 111.5, with an overall volatility of approximately 60%, making it a highly volatile stock. Looking at a broader picture, the more significant mid-term resistance above remains at HKD 126.6. Therefore, although the current price is not low, it hasn't truly reached the previous peak. On the support side, first look at the range of HKD 107 to HKD 104.5, which is near the pullback area after the short-term breakout, and also close to the upper Bollinger Band's digestion zone. Further down, look at HKD 100.5 to HKD 97.5, which is the short-term support zone near the 10-day and 5-day moving averages. Regarding resistance levels, focus on the short-term high of HKD 111.5 that was just touched; if broken, the next target would be the psychological resistance zone of HKD 115 to HKD 120, followed by the more critical previous peak at HKD 126.6.

In terms of technical status, the moving average structure shows a clear upward trend, with the 5-day, 10-day, 20-day, and 30-day moving averages roughly forming a bullish alignment, indicating that the recent uptrend has sustainability. In terms of the Relative Strength Index (RSI), the short-term RSI has risen into a relatively strong region, showing that buying momentum has significantly increased but also implying that the short-term rise may start to accelerate. Regarding the Bollinger Bands, the stock price has approached or even surged toward the upper band, and the channel is showing signs of widening upwards, usually representing a strong upward trend. However, this also indicates that blindly chasing prices at the most exuberant points may not be suitable in the short term since any slowdown in momentum could easily lead to consolidation at higher levels.

To confirm that the stock still has the strength to continue rising, the triggering conditions are clear: it must first effectively break through the short-term high of HKD 111.5, and not simply spike and fall back within a day. The breakthrough should be accompanied by sustained increase in trading volume and stable closing above that level, signifying that funds are willing to absorb shares at higher prices. If HKD 111.5 is broken through and stabilized, the probability of testing the HKD 115 to HKD 120 range will significantly increase. If the area around HKD 120 can be digested, pushing further toward HKD 126.6 would become much more reasonable. In other words, HKD 126.6 is not a target that can be directly confirmed by saying 'a surge in volume and price'; instead, it requires breaking through the two key levels of HKD 111.5 and HKD 120 step by step for the uptrend to extend to that level.

Regarding downside risks, the triggering conditions are equally clear. If the stock fails to break through HKD 111.5 and quickly falls below HKD 107, it indicates insufficient short-term buying power, and the uptrend would enter consolidation. If the support zone between HKD 104.5 and HKD 100.5 is breached, it signals that the momentum from the recent sharp rise is beginning to noticeably retreat, increasing the likelihood of a pullback to test the middle Bollinger Band at around HKD 97.5 or even HKD 91.4. In other words, the biggest risk now isn’t that the trend has worsened, but rather that after a rapid short-term rise, a deeper-than-usual normal retracement might occur.

To directly address investors' concerns about whether it's too high to enter now, the answer is that compared to the low of 69.7 yuan, the current level is certainly not low, and the cost of chasing in has clearly risen; thus, it cannot be described as 'cheap.' However, from a trend perspective, the current situation isn't purely an uncontrollable chase upwards since the moving averages are trending upward, RSI is on the stronger side, and prices are near the upper Bollinger Band, indicating the stock is indeed in a strong phase. The position has shifted from a low accumulation zone into a breakout momentum zone. It’s not that this position can’t be bought, but one must accept that short-term volatility will be significant, and waiting for clearer breakout signals would be more reasonable. As for whether it can break through the previous high of 126.6 yuan, I’d say there’s a chance, but it’s still too early to draw definitive conclusions. A more reasonable judgment would be to first see if 111.5 yuan can be effectively broken, then observe whether there is sufficient support around 120 yuan. If these two levels are steadily held, challenging 126.6 yuan becomes feasible. If 111.5 yuan fails to break and quickly falls back below 107 yuan, discussing 126.6 yuan remains premature.

As for investors’ focus on call warrants with a strike price of 120.99 yuan, this idea is generally reasonable because 120.99 yuan is not far from the current price, making it relatively close to the target area above. If the underlying stock truly breaks through 111.5 yuan and moves toward 120 yuan, such products theoretically should reflect the underlying stock’s rise well. However, it’s important to note that the current price is still some distance away from 120.99 yuan. If the underlying stock merely oscillates at high levels without a quick upward breakout, the product's performance may not be as sensitive as investors expect. Therefore, the key isn’t just whether the product's strike price is attractive but whether the underlying stock itself completes its breakout first.

Overall, Rongchang Bio’s short-term risk-reward ratio remains positive, but it’s no longer the high-risk-reward scenario associated with buying at lower levels. Instead, we’ve entered a phase where 'breakouts are worth chasing, while failure to break calls for caution against pullbacks.' If 111.5 yuan is effectively broken, the short-term risk-reward ratio will remain high, providing conditions to gradually aim for 120 yuan or even 126.6 yuan. But if one chases without a breakout, the risk-reward ratio will significantly drop due to nearby overhead resistance and potential downside retreat. At this stage, the most reasonable conclusion isn’t simply saying “it’s too high to buy” or asserting “a previous high will definitely be broken.” Rather, one must acknowledge that this is a strong stock, but the truly worthy position for optimism lies after breaking 111.5 yuan, not blindly ignoring pullback risks solely because of today’s surge in trading volume.

5, Nio-SW (09866.HK): At the current level, should we continue holding the call warrants, or is it better to exit? What is the volatility range? Keep an eye on call warrants with a strike price of 56.9 yuan.

YaoLai-SW is currently trading at 48.38 yuan, having rebounded repeatedly from the recent low of 34.82 yuan, with the latest high reaching 49.04 yuan. In the short term, it has clearly approached the recent peak. If we consider this uptrend as the primary observation range for now, the trading range could initially be viewed between 34.82 yuan and 49.04 yuan, with overall volatility of approximately 40.8%, which classifies it as a highly volatile stock. From a more practical short-term trading perspective, the current short-term volatility range could be seen as between 43.80 yuan and 49.04 yuan, as the 44-yuan mark has been re-established after multiple recent dips. On the support side, look first at the 47-yuan to 45.70-yuan range, which is close to the short-term moving average and recent consolidation zone. Below that, look at the 44.16-yuan to 43.80-yuan range, which is near the 20-day line and the midpoint support area of the recent recovery structure. On the resistance side, first consider 49.04 yuan, the recent high. If this is broken, the next step could test 51 yuan to 51.03 yuan, near the upper Bollinger Band. Only beyond that would the stock progressively challenge higher areas.

From a technical standpoint, the moving average structure is clearly upward-trending, with the 5-day, 10-day, 20-day, and 30-day lines roughly aligned upward, reflecting the continuation of the recent uptrend. The relative strength index is at a relatively strong level, indicating short-term momentum is still present, but also showing that the stock is no longer at a low price. Investors need to accept that fluctuations may increase when chasing in. Regarding the Bollinger Bands, the stock price is now close to the upper band, with signs of the channel widening upward. This indicates that the trend remains strong but also shows that the stock has reached a relatively elevated short-term position. If it fails to break out immediately, it’s likely to consolidate at high levels first.

To confirm whether the stock still has the momentum to rise further, the trigger condition is clear: it must effectively break through 49.04 yuan—not just briefly during intraday trading but by closing above it, preferably with supporting trading volume. Only then would it indicate that funds are willing to absorb shares at higher levels. If 49.04 yuan is genuinely broken, the stock has the potential to test near 51 yuan, after which we’ll assess whether the uptrend can be pushed further. In other words, chasing near the current price doesn’t offer as high a risk-reward ratio as the earlier stages of the rally. What will truly lift the short-term risk-reward ratio is the continuation after breaking 49.04 yuan, rather than relying solely on staying near the current highs.

Regarding downside risks, the trigger conditions are equally clear. If the stock fails to break through 49.04 yuan and instead drops below the 47-yuan to 45.70-yuan support zone, it would signify that short-term chasing capital is beginning to retreat, shifting the trend from aggressive upward movement to consolidation at high levels. If it further breaches the 44.16-yuan to 43.80-yuan range, it suggests the rhythm of this rally is being disrupted, potentially leading to a retracement towards the 40-yuan level or even lower support zones. Therefore, the biggest risk at the moment isn’t an immediate reversal of the major trend, but that the stock is already near its recent high. If the breakout fails, the short-term pullback space could be significant.

To directly respond to investors’ questions about whether to keep or exit the call warrants at the current level, the key isn’t just whether the underlying stock remains strong today but whether 49.04 yuan can be broken. If the underlying stock effectively breaks through 49.04 yuan and stabilizes, there’s reason to continue holding the call warrants since the underlying stock might push the uptrend towards 51 yuan, giving the product more extended performance. However, if the underlying stock consistently fails to break through 49.04 yuan or even retreats below 47 yuan to 45.70 yuan, the risk-reward ratio of holding the call warrants will noticeably decline. This is because, during consolidation, warrant prices often suffer not only from pullbacks in the underlying stock but also from time decay. As for investors focusing on call warrants with a strike price of 56.9 yuan, this strike price is significantly higher than the current price, making it an out-of-the-money strategy. If the underlying stock merely consolidates between 48 yuan and 49 yuan, the tracking ability of such products may not be ideal. They’re more suitable if the underlying stock not only breaks 49.04 yuan but also pushes toward 51 yuan or higher. Otherwise, the warrant’s performance could disappoint despite limited declines in the underlying stock.

Regarding your question about the volatility range, for the current major uptrend, the range is 34.82 yuan to 49.04 yuan, with volatility of approximately 40.8%. For a more practical short-term trading range, look at 43.80 yuan to 49.04 yuan, which aligns more closely with current trading setups. In summary, YaoLai-SW’s short-term risk-reward ratio remains slightly positive but has transitioned from the early low-accumulation zone to a breakout confirmation zone near resistance. The current price isn’t entirely untenable for holding, but it’s no longer a comfortable position for blind holding. If 49.04 yuan is effectively broken, continuing to hold the call warrants can be considered. If the breakout fails and falls below 47 yuan to 45.70 yuan, reducing holdings or exiting is advisable, as short-term control may no longer favor the bulls. $MS-NIO @EC2606A.C (22988.HK)$$UB-NIO @EC2606A.C (23556.HK)$

6. China Eastern Airlines (00670.HK): The small holiday is here, the rebound has started. What’s the short-term target? In the warrant market, investors mentioned that the call warrants they bought are not tracking the price increase well, with a strike price of 7.33 yuan.

China Eastern Airlines is currently trading at 3.91 yuan. After its earlier decline from a high of 6.40 yuan to a recent low of 3.36 yuan, if we consider this as the primary observation range, the stock can be viewed as oscillating between 3.36 yuan and 6.40 yuan, showing an overall volatility of approximately 90.5%, which indicates a highly volatile but still incomplete recovery pattern. For a closer short-term trading range, the focus can be on 3.36 yuan to 4.25 yuan as the main short-term rebound zone, since 3.36 yuan represents the recent clear low, while 4.20 yuan to 4.25 yuan serves as a noticeable resistance level during the latest pullback. On the support side, 3.80 yuan to 3.67 yuan is key, as this area is close to the recent consolidation level and also acts as the first major support for the renewed upward movement; if broken, the next support would revert to 3.36 yuan. Resistance-wise, 3.99 yuan to 4.00 yuan is crucial, as it is near the 20-day moving average and also a psychological round-number level in the short term. If this level is surpassed, the next targets could be 4.25 yuan to 4.50 yuan, and further up, there might be potential to challenge 4.75 yuan.

From a technical standpoint, the moving averages remain downward-trending overall, with the 5-day, 10-day, 20-day, 30-day, and even longer-term moving averages yet to reverse, indicating that the current rally remains within the context of a downtrend rather than signaling a confirmed trend reversal. Regarding the Relative Strength Index (RSI), the short-term RSI has risen above 50, reflecting reduced selling pressure and improved momentum compared to before, though it remains neutral with only slight signs of improvement and cannot be considered very strong. In terms of the Bollinger Bands, after previously touching the lower band and rebounding, the stock is now mainly hovering in the lower-middle portion of the channel, suggesting that the sharpest part of the decline has slowed down but without clear upward expansion. Therefore, this phase appears more like a technical correction rather than the start of a strong one-sided uptrend.

To confirm that the rebound has truly begun, the triggering conditions must be clear: the stock price must first stabilize above 3.99 yuan to 4.00 yuan, then break through 4.25 yuan, and ideally not just rely on intraday spikes but close firmly above these levels, which would indicate that the move isn't merely a short-term oversold bounce but has the potential to push towards 4.50 yuan or even 4.75 yuan. In other words, saying “the small holiday is here, the rebound has started” is not entirely baseless, as the stock has indeed rebounded from the 3.36 yuan low and short-term sentiment has improved. However, unless the key levels of 4.00 yuan and 4.25 yuan are breached, it's premature to declare the start of a meaningful rebound.

On the downside risk, the triggering conditions are equally clear. If the stock fails to hold above the 3.80 yuan to 3.67 yuan support zone, it means the current rally lacks follow-through buying power, which would damage the short-term rebound structure. A further drop below 3.36 yuan would confirm the continuation of weakness, and not only would the rebound target need to be revised downwards, but the overall trend would also shift back into a bottom-probing pattern. This implies that the biggest risk now is not that the rebound ensures safety, but rather that the stock remains in a weak structure, with only a temporary recovery. If key supports fail to hold, the rebound could easily fizzle out.

To directly address the investor’s question, for a short-term target, a reasonable first objective at this stage would be around 4.00 yuan, followed by 4.25 yuan upon a breakout. If it can stabilize above that, the next target could extend to 4.50 yuan. Setting overly ambitious targets now overlooks the fact that multiple moving averages and a downward trend still present significant resistance. As for the situation where the call warrants purchased in the warrant market are not tracking the rise, with a strike price of 7.33 yuan, this is understandable because 7.33 yuan is significantly far from the current stock price of 3.91 yuan, making them deep out-of-the-money call warrants. When the underlying stock is merely experiencing a technical rebound from a low rather than a rapid surge toward the strike price, such products tend to have low sensitivity to small stock price increases. Additionally, time decay further reduces their responsiveness, leading to scenarios where the stock rises but the warrant price does not react favorably. Hence, the issue may not be that the stock is completely stagnant, but rather that the product itself is too far out-of-the-money to effectively track price movements.

In summary, China Eastern Airlines’ short-term attractiveness has improved from its previous lows but remains cautiously neutral. The bullish case hinges on the stock stabilizing above 4.00 yuan and breaking through 4.25 yuan. The bearish scenario relies on a breakdown below 3.67 yuan, or even a retest of 3.36 yuan. At this stage, it’s more reasonable to view the current movement as a technical rebound within a weak trend rather than a full-blown trend reversal. Investors who believe the rebound has started may be directionally correct, but their statements should come with caveats. As for using call warrants with a strike price of 7.33 yuan to capture this kind of rebound, the odds of success are relatively low, as the magnitude of the rebound may not be sufficient to drive favorable performance in such products.

Friendly Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. Market data, opinions, and analyses contained herein may change at any time without prior notice. We are not responsible for any losses or damages caused by reliance on the information in this article. Technical analysis only indicates whether certain technical conditions are met and should be used alongside other data for a comprehensive assessment of asset performance; trading decisions should not be made solely based on this article. Note that past performance is not indicative of future results. Follow Jenny’s HK warrants for more professional insights. $Hang Seng Index (800000.HK)$$Hang Seng China Enterprises Index (800100.HK)$$Hang Seng TECH Index (800700.HK)$$CHINA SOUTH AIR (01055.HK)$$CATHAY PAC AIR (00293.HK)$$WUXI BIO (02269.HK)$$AKESO (09926.HK)$$INNOVENT BIO (01801.HK)$

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