Great Wall Motor Short-term Analysis: Rebound reaches overbought zone, inflow of funds supports short-term momentum

As of April 2, Great Wall Motor (02333) closed at 13.11 yuan, up 4.63%, with a turnover of 333 million yuan. The stock price has rebounded significantly after several days of recovery, breaking through the 10-day moving average (12.61 yuan), the 30-day moving average (12.78 yuan), and approaching the 60-day moving average (13.19 yuan). Short-term moving averages are beginning to turn, reflecting strengthening short-term momentum. From a technical perspective, the current stock price is firmly above the 10-day and 30-day moving averages, but the 60-day moving average still forms short-term resistance near 13.19 yuan. Regarding sector performance, BYD $BYD COMPANY (01211.HK)$ closed at 102.7 yuan, Geely Auto $GEELY AUTO (00175.HK)$ closed at 23.22 yuan, up approximately 5.73%, XPeng Motors $XPENG-W (09868.HK)$ Reported at HKD 66.85, reflecting increasing attention on traditional automakers transitioning to new energy sectors.

In terms of technical indicators, the RSI rebounded to 51, entering a neutral-to-strong region; the VR volume ratio indicator suggests 'oversold, potential bottoming out, buy,' while both the bull-bear power indicator and Ichimoku Cloud turned to 'buy,' indicating growing support at lower levels and improving mid-term structure. However, stochastic oscillators and Williams %R both switched to overbought sell signals, with CCI also in an overbought state, suggesting that after a sharp rise, short-term momentum has been partially exhausted, necessitating technical consolidation. The MACD signal turned to 'buy,' Bollinger Bands remain 'neutral,' and the overall technical indicator summary signal is 'sell' with strength at 9. This trend-positive but weakening short-term oscillation pattern indicates that the stock price may face potential pullback pressure after the rebound.

From a key position analysis, initial support below lies at HKD 12.5, corresponding to the 10-day moving average and recent short-term support during the rebound. If it breaks down, the next level of support is at HKD 12.1. On the resistance side, the first hurdle is at HKD 13.6, which was a previous rebound high during the downtrend. A breakout could target HKD 14.3.

Regarding warrant flows, as of April 2, Great Wall Motor's call warrants saw net inflows over the past five trading days, totaling HKD 48,000, showing market optimism about the short-term outlook. On a daily basis, flows followed a 'initial inflow, then minor outflow' rhythm: consistent net inflows were seen on March 26 and 27, with March 27 registering the largest single-day inflow of HKD 48,000, reflecting concentrated bullish sentiment; March 31 and April 1 turned to slight net outflows, with HKD 23,000 outflow on April 1, signaling some profit-taking. Overall, there were predominantly net inflows with only minor profit-taking recently, with bullish forces still dominant. It will be important to monitor whether inflows continue to confirm a sustained upward trend.

For product deployment, if investors believe Great Wall Motor can hold above the HKD 12.5 support and challenge resistances at HKD 13.6 and HKD 14.3, they may consider two call warrants. Credit Suisse Call Warrant (26678) $CI-GWMC@EC2609A.C (26678.HK)$ Strike price at HKD 15.08, with effective leverage of 4.8 times, the highest among similar products, and the lowest implied volatility. Higher leverage suits investors expecting a rapid advance towards HKD 14.3 after breaking through HKD 13.6, effectively amplifying gains from the underlying stock’s rise. Low implied volatility means the product price is less affected by changes in market expectations of future volatility, keeping pricing closer to intrinsic value. The strike price is approximately 14% higher than the current stock price, with a notable gap to the second resistance at HKD 14.3, implying significant upside is needed for the warrant to move into the money.

Morgan Stanley Call Warrant (27821) $MS-GWMC@EC2609A.C (27821.HK)$ Strike price at HKD 15.09, with effective leverage of 4.9 times, offering both ideal leverage and implied volatility. Similar to the Credit Suisse warrant, this product has slightly higher effective leverage, suitable for investors anticipating strong rebounds, providing greater profit amplification when the underlying stock breaks out upwards. Both call warrants have strike prices near HKD 15, with a distance from resistances at HKD 13.6 and HKD 14.3. Deployment should consider that a substantial stock price increase is required to move these warrants into the money, facing relatively higher time decay pressure, making them more suitable for short-term breakout plays.

It is important to note that Great Wall Motor’s technical indicators currently show conflicting signals, with stochastic oscillators and Williams %R both in overbought territory, indicating short-term consolidation needs. If the stock fails to hold above HKD 12.5 and sees profit-taking, price pressure on the above-mentioned call warrants will significantly increase. Investors should closely watch the HKD 12.5 level as a key observation point and strictly control their positions. Additionally, recent modest net outflows indicate some profit-taking, another factor to consider when deploying.

Overall, Great Wall Motor is in a phase of 'technical rebound and short-term overbought conditions.' There is a higher likelihood of short-term fluctuations between HKD 12.5 and HKD 13.6. The optimal strategy would be to wait for the stock price to clearly break through HKD 13.6 resistance or confirm support at HKD 12.5 before taking directional positions. If operating within this range, strict position control and reasonable stop-loss levels must be set.

Interactive Q&A:

Do you think Great Wall Motor can break through the resistance at 13.6 yuan in the short term and move higher?

A. It will break through, improved new energy vehicle sales and capital inflow will drive the stock price

B. It will struggle to break through; short-term overbought conditions will trigger technical consolidation.

C. First, consolidate within the range of 12.5 yuan to 13.6 yuan

Feel free to share your thoughts in the comment section.

Warm Reminder: This article does not constitute any investment advice. It 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 evaluation of asset performance should be made using other data, and trading decisions should not be based solely 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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