CNOOC is experiencing a tug-of-war around the 26 yuan mark, with positive news failing to reverse the weak consolidation pattern.

After rebounding from a recent low of 22.86, it once rose to 30.98, but then retreated for consolidation and is now moving sideways near 26 yuan. The short-term trend indicates weakness with initial signs of stabilization.

From the perspective of the oil and gas sector, the market was broadly under pressure the previous day (20th), with CNOOC falling by 2.45%, $PETROCHINA (00857.HK)$ dropping by 3.27%, $SHANGHAI PECHEM (00338.HK)$Down 2.36%. Technical signals are diverging: CNOOC and Sinopec received 'Buy' signals, indicating a technical rebound demand after being oversold/over-depreciated; PetroChina's technical signal is 'Neutral'. Notably, CNOOC's closing price the previous day (HKD 26.32) was close to its MA60 mid-term support level (HKD 26.15), showing that its trend structure is more resilient compared to PetroChina's bearish moving averages arrangement. This indicates that while CNOOC remains in a weak consolidation phase, it still retains key mid-term support amidst broad sector declines, making the battle at the HKD 26 mark not just a technical defense but also a benchmark for whether the sector can stabilize.

From investor comments, the market’s current biggest feature is neither unanimous optimism nor pessimism, but rather confusion and impatience regarding stock performance. On one hand, some investors believe the company has positive news flow and may see an uptick towards the end of trading, hoping that the stock will consolidate at lower levels before regaining strength. On the other hand, more comments reflect disappointment and doubt, especially when there is no clear correlation between oil price fluctuations, overall market performance, and individual stock movements, leading to a noticeable lack of confidence in CNOOC’s short-term performance. This situation illustrates that the current market focus isn't solely on positive news but on when the stock might truly show technical improvement.

Overall market sentiment is neutral to weak, with a small expectation for a rebound. The more optimistic side mainly hopes for strength returning in the afternoon, a late-session surge, and favorable news gradually reflecting in the stock price. The more pessimistic side focuses criticism on daily stock price declines, where even oil price fluctuations fail to bring positive momentum, raising doubts about excessive downward pressure. Common questions concentrate on a few areas, including whether favorable news will boost prices, whether the area near HKD 26 can hold, and whether the stock might re-test the HKD 25 level. This reflects that investors are currently most concerned not with how high the stock can rise, but whether it will break below key support zones again.

From a technical perspective, CNOOC's current price of HKD 26.32 is still below the middle Bollinger Band at HKD 27.82, with the Relative Strength Index (RSI) at 36.92, indicating weak short-term momentum without clear signs of a turnaround yet. However, the current price is gradually approaching support zones at HKD 26.16 and HKD 26, meaning that although short-term weakness persists, it's beginning to approach levels where buying interest could emerge. Significant resistance remains above at HKD 26.58 to HKD 27.82, and until this range is broken, the overall trend remains within a post-correction consolidation pattern.

At this stage, the risk-reward ratio is neutral because although the stock price hasn't completely stabilized or turned bullish, it's already nearing the support zone, so downward space may not be as wide as before. If it can stabilize above HKD 26.16 and further break through HKD 26.58, there's potential for a short-term test of HKD 27.82. However, if it breaks below HKD 26.16, then attention must be paid to testing support near HKD 26, which could further dampen market sentiment. In other words, the area around HKD 26 is now both a technical support zone and a crucial point for maintaining market confidence.

Reply to some investors' views:

@232467970

There is positive news in the market, but the stock price may not immediately reflect upward movement. What's more important now is whether it can break through HKD 26.578; otherwise, it remains in a weak consolidation pattern with fluctuations.

@淡淡的味道1961

The recent trend indeed doesn’t look good, as the stock price remains within a post-correction consolidation pattern. Until it returns near the middle band, restoring market confidence will naturally be difficult.

@日日輸爆廠

Entering near HKD 26.4 only to encounter profit-taking does indeed create pressure. The short-term trend hasn't strengthened yet, so expect continued volatility.

Based on the above analysis, the strategies for deployment can be divided into the following main approaches:

$CTCNOOC@EP2609A.P (27165.HK)$$MBCNOOC@EC2606A.C (22470.HK)$

$HS#CNOOCRC2807B.C (64509.HK)$$SG#CNOOCRP2705B.P (68567.HK)$

For more market analysis, stay tuned to Jenny's daily updates on 'Hong Kong Stock Warrants'!

Reminder: This article does not constitute any investment advice.

This article 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 assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.

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