Ganfeng Lithium is approaching its previous high, should investors chase the price or wait? The divergence between bulls and bears is widening

Based on the closing data analysis from last Friday (the 24th), $GANFENGLITHIUM (01772.HK)$

The stock closed at 82.05 yuan, with a single-day increase of up to 9.18%. Technically, its share price is higher than the short-term moving average MA10 (80.33 yuan) and the medium-term moving average MA30 (71.23 yuan), but lower than the long-term moving average MA60 (67.085 yuan), indicating strong short-term rebound momentum and an initial breakout of the medium-to-long-term trend.

April 24 [HKEX Podcast] Part-2-SMIC, Ganfeng Lithium, CATL $SMIC (00981.HK)$$CATL (03750.HK)$

Its Relative Strength Index (RSI) is at 60, entering the bullish range and nearing overbought levels. However, the overall technical indicator signal suggests 'Sell,' while multiple oscillators show 'Buy' signals. This reflects that despite the strong price surge, the technical model has issued a short-term profit-taking warning due to excessive gains, and caution against a technical pullback is advised.

In terms of peers (lithium battery, resource sector), $CMOC (03993.HK)$ Closed at 18.82 yuan, slightly up by 0.32%, with the technical indicator summary signal being 'Buy'. $JIANGXI COPPER (00358.HK)$ Closed at 37.28 yuan, slightly up by 0.43%, with the technical indicator summary signal also being 'Buy'. $ZIJIN MINING (02899.HK)$ Closed at 36.8 yuan, slightly down by 0.27%, with the technical indicator summary signal being 'Neutral'. $MMG (01208.HK)$ Closed at 9.07 yuan, down by 1.41%, with the technical indicator summary signal being 'Sell'. $CHALCO (02600.HK)$ Closed at HKD 11.99, surged by 3.72%, with a technical summary signal indicating “Buy.” It is evident that metal resource stocks showed mixed performance on the day, with lithium stocks (Ganfeng) and aluminum stocks (Chinalco) performing strongly, albeit with contrasting technical signals, highlighting differing views among investors regarding individual stock trends. Overall, after the previous adjustment phase, some stocks exhibited technical rebounds, but the risks associated with chasing highs have begun to emerge.

The market's view on Ganfeng Lithium is clearly divided. On one side, some believe the sector has the opportunity to gradually recover, even maintaining an optimistic outlook for the medium to long term; on the other side, attention is focused on its recent underperformance, remaining in a loss-making state, and there are even discussions about whether it’s time to exit. Some investors are inclined to wait for a lower level before making a move, such as the range of 70 to 75 or even lower, while others think the current structure is still intact and it may be premature to turn overly bearish.

Overall sentiment reflects heightened divergence but hasn't completely turned bearish. On one hand, some see a triple-bottom structure and potential for sector recovery; on the other hand, some funds have chosen to exit early due to the inability to sustain a short-term breakout, reflecting that the current level is in a phase of 'lack of confidence but not collapse.' Common questions center on two points: whether the current price is still worth entering, and if a pullback occurs, what would be the reasonable support zone.

From a technical perspective, last Friday (May 24) closed at 82.050, still holding above multiple moving averages, including the 5-day line at 79.300 and the 10-day line at 80.330, with the overall structure remaining intact. The middle axis of the Bollinger Bands sits at 76.748, with the current price notably higher than the middle axis, supported by a Relative Strength Index (RSI) of around 60, indicating momentum remains but isn’t overheated. However, the area between 86.581 and 87.500 represents clear resistance, also the previous high, and breaking through in the short term will require additional capital inflow.

Strategically, 80.330 acts as a short-term dividing line. If it can hold steady and break back above 86.581, there will be conditions to challenge 87.500 again; however, if 80.330 is breached, the likelihood of a retest to 79.300 or even lower increases, shifting the trend into consolidation mode, aligning with the market sentiment of 'waiting for a lower entry point.'

Reply to some investors' views:

@fsqy2024 The market places more emphasis on the current trend structure, which still falls under consolidation after a rebound, with no clear signs of weakness emerging.

@食粒旺仔小饅頭 Waiting for a lower position is a relatively conservative strategy; note that prices may not necessarily retreat to that range.

@234094576 Fundamental news can affect sentiment, but technically, key support levels have not been broken yet, and the trend has not entirely shifted to bearishness.

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

Deployment focus: Holding above 80.330 yuan maintains a bias toward strong consolidation, breaking above 86.581 yuan allows another attempt at 87.500 yuan; if 80.330 yuan is breached, a short-term retest of 79.300 yuan is possible.

Strategy One | Follow-up after stabilizing above 80.330 yuan

$UBGANFE@EC2607A.C (25556.HK)$ | Strike price 88.77 yuan | Actual leverage 3.8x | Close to upper resistance zone, suitable for short-term upside follow-through if stock price holds support

$BPGANFE@EC2607A.C (25346.HK)$ ｜Strike price 88.77 yuan｜Actual leverage 4.4x｜Higher leverage, suitable for aggressive follow-up after confirming rebound strength

$GJGANFE@EC2607A.C (25369.HK)$ ｜Strike price 88.77 yuan｜Actual leverage 4.3x｜Higher elasticity, suitable for deployment when the stock price remains strong but hasn’t officially broken out

Strategy Two｜Follow momentum after breaking through 86.581 yuan

$UBGANFE@EC2609A.C (25276.HK)$ ｜Strike price 100.98 yuan｜Actual leverage 3.3x｜Higher strike price, suitable for betting on extended upside after a breakout

$MSGANFE@EC2609A.C (25245.HK)$ ｜Strike price 100.98 yuan｜Actual leverage 3.4x｜More suitable for deployment if anticipating further upside after a breakout

$HSGANFE@EC2609A.C (25350.HK)$ ｜Strike price 100.98 yuan｜Actual leverage 3.4x｜Suitable for following the trend after breaking resistance, but not advisable for consolidating at lower levels

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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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