Geely Auto shows divergence as it approaches the previous high; breaking through 24.46 yuan becomes the short-term key

Continuing upward after rebounding from the low of 14.96, Geely Auto closed at 24.38 yesterday (the 21st), standing firmly above multiple short-term and medium-term moving averages, with an overall trend still leaning bullish. The current share price is approaching the previous high of 24.46 while nearing the upper Bollinger Band, indicating that although the uptrend remains intact, resistance above is starting to build. Before a further short-term rise, the likelihood of consolidation near the highs is increasing.

Looking at the automobile manufacturing and new energy vehicle sectors, market movements were mixed yesterday (the 21st). Geely Auto rose by 1.16%, $GWMOTOR (02333.HK)$ rose by 1.36%, while $LI AUTO-W (02015.HK)$ 、 $BYD COMPANY (01211.HK)$ 、 $XPENG-W (09868.HK)$ 、 $NIO-SW (09866.HK)$ recorded declines.

Technical signals show divergence: Geely’s RSI has reached 70 (extremely overbought), with a technical rating of 'Sell,' making it the riskiest target within the sector. XPeng and Great Wall received 'Buy' signals, showing their relatively stable short-term structures. Notably, despite Geely's rising stock price, its RSI is much higher than its peers (XPeng RSI about 51, Great Wall RSI about 54), meaning its short-term overbought condition is extremely pronounced compared to the rest of the sector, contrasting with the profit-taking pressure faced by peers.

This indicates that Geely's strong approach towards previous highs occurs in an environment where sector momentum is generally weakening and funds are becoming more cautious. Whether it can break through HKD 24.46 depends not only on its own momentum but also on whether the overall sector sentiment provides support.

Market commentary reveals that Geely currently presents a highly divergent situation under a typical strong stock scenario. On one hand, some investors believe this is just normal consolidation after a rise and remain optimistic about future prospects, even looking towards higher targets; on the other hand, many voices have started to worry about distribution at highs, short-term peaks, or even potential pullbacks. This reflects that while the market still acknowledges Geely's overall strength, facing resistance near previous highs, investor sentiment has gradually shifted from simply expecting further gains to adopting a wait-and-see attitude.

Common questions mainly focus on several directions, including whether the current price is still worth chasing, whether it has entered a high-level sideways distribution zone, whether there will be a short-term drop below HKD 20 or return to the range between HKD 21 and 22, and if breaking through HKD 24.46 offers the possibility to test HKD 25.62 or even higher. The core behind these discussions is essentially the same issue: although Geely hasn't weakened yet, its share price is no longer in a low-risk value-for-money zone but rather at a critical position before resistance levels.

Technically, HKD 23.63 is the short-term watershed. As long as the share price remains above it, the overall strong structure can be maintained. If it breaks through HKD 24.46 further, there may be opportunities to test HKD 25.62 in the short term. However, if it subsequently loses support at HKD 23.63, caution should be exercised against the uptrend turning into deeper consolidation, with possible tests of nearby supports around HKD 22.79. Currently, the Relative Strength Index (RSI) is above 60, reflecting short-term momentum is still present but not extremely overheated, so there is still a basis for upward movement, though space and safety margins for further chasing have narrowed significantly compared to earlier.

Overall, Geely Auto’s reward-to-risk ratio is currently neutral. The trend remains strong, but the position is close to previous highs. The key is not just how heated sentiment is, but whether it can truly break through HKD 24.46. If it breaks through, the strong trend could continue; otherwise, it will likely enter a period of repeated fluctuations at high levels. For investors who already hold shares, it's best to observe changes between the watershed and resistance levels now; for those without positions, blindly chasing due to heated sentiment alone is not advisable.

Reply to some investors' views:

@戰鬥員K After such a significant rise, consolidation is indeed normal. The key now is whether it can break through HKD 24.46 afterward.

@東區股神 If it can break through the previous high, there may be further upside, but for now, we should first see whether the resistance level can be effectively surpassed.

@中神通王重陽 The current price is close to the previous high, naturally raising concerns in the market about potential profit-taking at highs, but technically no clear signs of weakness have emerged.

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

Key deployment: 23.63 serves as the watershed. If it holds steady, an upward test toward 24.46 may continue, with a breakout potentially extending to 25.62; if 23.63 is breached, be cautious of a pullback to 22.79.

Strategy One | Enter on a breakout above 24.46

$BIGEELY@EC2606A.C (20970.HK)$ | Strike price 24.77 yuan | Actual leverage 8.2x | High leverage near the current price, suitable for following the trend immediately after a breakout to capture short-term acceleration.

$UBGEELY@EC2606A.C (21015.HK)$ | Strike price 24.77 yuan | Actual leverage 7.8x | Also offensive, but with slightly lower volatility, suitable for trend-following while controlling fluctuation range.

$GJGEELY@EC2606A.C (21621.HK)$ | Strike price 24.77 yuan | Actual leverage 7.4x | More balanced allocation, suitable for initial breakout follow-ups rather than ultra-short-term sprints.

Strategy Two | Accumulate on dips while holding above 23.630

$UBGEELY@EC2611A.C (27869.HK)$ | Strike price 27.82 yuan | Actual leverage 4.3x | Moderate leverage, suitable for phased accumulation after confirming support on a retest.

$BIGEELY@EC2611A.C (22626.HK)$ | Strike price 27.82 yuan | Actual leverage 4.3x | Stable choice at the same level, suitable for range trading with a focus on steady upward movement.

$HUGEELY@EC2612A.C (21709.HK)$ | Strike price 27.80 yuan | Actual leverage 4.4x | Slightly higher flexibility, suitable for improving return efficiency after confirming stability.

Strategy Three | Turn bearish if 23.63 is breached

$CTGEELY@EP2610A.P (28082.HK)$ | Strike price 18.48 yuan | Actual leverage 4.1x | At-the-money put, suitable for following the downturn after breaking through the watershed.

$GJGEELY@EP2610A.P (28188.HK)$ | Strike price 18.47 yuan | Actual leverage 4.1x | Similar choice in the same category, suitable for defensive deployment when the strength of the decline is uncertain.

$UBGEELY@EP2610B.P (28169.HK)$ | Strike price 18.47 yuan | Actual leverage 3.9x | More stable configuration, suitable for expecting a pullback but not necessarily a sharp decline.

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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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