SMIC surges toward resistance, retail sentiment is optimistic but starting to worry about overextension

SMIC's current price is 69.75, breaking through multiple key moving averages, showing a clear short-term strengthening trend. Additionally, the Relative Strength Index (RSI) has risen to 77.545, indicating the stock has entered overheated territory in the short term. Sentiment in comments leans significantly optimistic, with many investors mentioning bullish weekend news, positive catalysts, institutional buying, and leading semiconductor stocks setting the pace, reflecting high expectations for SMIC’s short-term upward momentum. Some investors believe that if positive news continues to flow, the stock could open higher next week, signaling rising momentum-chasing sentiment.

However, some comments are beginning to show caution, including suggestions like 'wait for a pullback next week to buy again,' 'wait for a dip to enter,' and concerns about 'too much volume—might it be overextended?' These types of comments suggest that even though the market is optimistic, some capital is unwilling to chase highs after a rapid surge and is waiting for a retracement level.

The overall market sentiment is leaning towards being overheated and optimistic, but there are already voices of short-term profit-taking and waiting for a pullback. Common concerns focus on earnings report timing, whether positive news can continue, whether the current price is still worth entering, and whether a pullback might occur after a sharp rise on high volume.

@Bullish momentum is surgingCommentary: A small drop yesterday, a big rise today, institutions are aggressively buying

The current trend is indeed strengthening, but the RSI is already in overbought territory; caution is needed when chasing with controlled position sizing.

@Three Points to Boost the Rise@三分摧漲Commentary: An explosive surge of power

Today’s upward trend is strong, but it is approaching the upper Bollinger Band, so chasing highs in the short term should be avoided.

@Blah Blah Bull@吧啦吧啦牛Commentary: If gains reach tenfold, it’s not just about rising a few percentage points

Market expectations have already been reflected in the upward trend; the next step is to see whether 65.300 can break through.

@I'm a deer, not a horse@我是鹿不是馬Commentary: Haven’t seen you for a while, what's making you so bullish?

In the short term, the stock price has risen above multiple moving averages, and the technical trend has clearly strengthened.

@Southern Breeze indicated: The semiconductor leader is setting the pace first

Sentiment in the semiconductor sector has improved, providing support for SMIC, but it still depends on overcoming its own resistance levels.

In response to the current stock price nearing a key resistance level, investors may consider capturing potential upside through phased call warrants. If the stock price is expected to hold above current support and attempt to test the first resistance level, attention can be given to products with strike prices near HKD 69. Among them, product 19350 $UB-SMIC@EC2609A.C (19350.HK)$ offers 4.5x actual leverage with a strike price of HKD 69.04, suitable for short-term attempts to test the continuation of resistance; product 19144 $HS-SMIC@EC2610A.C (19144.HK)$ has a strike price of HKD 68.93 and leverage of 4.3x, offering a more balanced flexibility, ideal for use after consolidation at higher levels before another upward move; product 18916 $CI-SMIC@EC2610A.C (18916.HK)$ provides leverage of 4.2x, relatively lower, suiting investors who wish to avoid excessive chasing of highs and prefer a steadier rhythm in participating in rebounds.

If the stock price successfully breaks through resistance and confirms an upward trend, investors can shift to products with strike prices around HKD 80 and higher leverage to capture extended gains. Product 25682 $UB-SMIC@EC2607A.C (25682.HK)$ offers 6.7x leverage with a strike price of HKD 80.05, providing higher flexibility, making it suitable for attempting further upward moves post-breakout; product 25863 $GJ-SMIC@EC2607B.C (25863.HK)$ provides leverage of 7.0x, reacting more sensitively, ideal for short-term momentum chasing when the breakout strength is clear; product 19950 $BP-SMIC@EC2608A.C (19950.HK)$ offers 6.4x leverage with a strike price of HKD 80.00, better suited for following the trend after confirmation of a breakout, maintaining a relatively balanced rhythm. Overall, investors can select appropriate products based on their confidence in resistance breakthroughs and risk tolerance during both consolidation and breakout phases.

$Hang Seng Index (800000.HK)$$Hang Seng TECH Index (800700.HK)$

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 combine other data and should not solely rely on this article to make trading decisions. Please note that past performance is not indicative of future results. Follow Jenny's insights on Hong Kong stock warrants for more professional analysis.

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