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Domestic chip prices surge! Hong Kong-listed semiconductor stocks soar across the board
港股窩輪Jenny
joined discussion · Apr 28 10:38

Hua Hong's stock price hits a new high in sync with a 'sell' signal; 117 yuan becomes the key level for observing long-short dynamics

Looking at the semiconductor manufacturing sector, the market surged strongly the previous day (27th), $SMIC (00981.HK)$ surging 6.14%, $HUA HONG SEMI (01347.HK)$
Up 6.01%, both with similar gains. However, the technical risk is highly consistent: despite the sharp rise in stock prices, the technical indicator summary signals for both Hua Hong and SMIC are 'sell,' with their RSIs reaching 72 and 69 respectively, already entering the extremely overbought zone.
Looking at the semiconductor manufacturing sector, the market surged strongly the previous day (27th), $SMIC (00981.HK)$ surging 6.14%, $HUA HONG SEMI (01347.HK)$ rising 6.01%, with both increases being similar. However, the technical risks are highly consistent: despite the rapid rise in stock prices, both Hua Hong and SMIC’s technical indicator summary signals are 'sell,' and their RSI levels have reached 72 and 69 respectively, entering extremely overbought territory. This indicates that Hua Hong's strong upward movement is not an isolated trend but is occurring in an environment where the entire sector is highly excited, yet technical indicators are uniformly signaling a strong sell. This divergence of 'price and volume rising while indicators are entirely bearish' usually suggests immense short-term profit-taking pressure, where any minor fluctuation could trigger a technical correction across the sector. Hua Hong Semiconductor closed at 114.600 the previous day (27th). Discussion focuses on whether to take profits after the sharp rise, if bullish warrants can continue benefiting, and whether the resistance zone between 116.500 and 124.000 can be broken. Market sentiment is clearly heating up, with many investors shifting from earlier观望 (observation) to worrying about the stock 'rising too fast,' while some holding positions hope for the upward trend to continue. Comments reflect two types of mindsets: one group hopes for continued large gains after purchasing or holding bullish warrants, while another begins contemplating taking profits at highs. Some investors believe expectations of client growth and increased holdings can still support breaking new highs, reflecting continued confidence in fundamental themes. However, following the sharp rise, 'daily gains like this...
This indicates that Hua Hong's strong upward movement is not an independent trend but occurs within a sector-wide frenzy where technical indicators universally signal strong selling pressure. This divergence of 'rising prices and volume but indicators unanimously bearish' typically suggests immense short-term profit-taking pressure, where any minor trigger could spark a sector-wide technical pullback.
Looking at the semiconductor manufacturing sector, the market surged strongly the previous day (27th), $SMIC (00981.HK)$ surging 6.14%, $HUA HONG SEMI (01347.HK)$ rising 6.01%, with both increases being similar. However, the technical risks are highly consistent: despite the rapid rise in stock prices, both Hua Hong and SMIC’s technical indicator summary signals are 'sell,' and their RSI levels have reached 72 and 69 respectively, entering extremely overbought territory. This indicates that Hua Hong's strong upward movement is not an isolated trend but is occurring in an environment where the entire sector is highly excited, yet technical indicators are uniformly signaling a strong sell. This divergence of 'price and volume rising while indicators are entirely bearish' usually suggests immense short-term profit-taking pressure, where any minor fluctuation could trigger a technical correction across the sector. Hua Hong Semiconductor closed at 114.600 the previous day (27th). Discussion focuses on whether to take profits after the sharp rise, if bullish warrants can continue benefiting, and whether the resistance zone between 116.500 and 124.000 can be broken. Market sentiment is clearly heating up, with many investors shifting from earlier观望 (observation) to worrying about the stock 'rising too fast,' while some holding positions hope for the upward trend to continue. Comments reflect two types of mindsets: one group hopes for continued large gains after purchasing or holding bullish warrants, while another begins contemplating taking profits at highs. Some investors believe expectations of client growth and increased holdings can still support breaking new highs, reflecting continued confidence in fundamental themes. However, following the sharp rise, 'daily gains like this...
Hua Hong Semiconductor closed at 114.600 yesterday (27th), with discussions focusing on whether to take profits after the rapid surge, whether bull certificate holdings can continue to benefit, and whether the resistance zone between 116.500 and 124.000 can be broken. Market sentiment is clearly overheated, with many investors shifting from earlier观望 (observation) to worrying about 'rising too fast,' while some holders hope for continued upward momentum.
The comments reflect two mindsets: one group hoping for further significant gains after buying or holding bull certificates, while another starts contemplating taking profits at highs. Some investors believe expectations of client growth and increased positions may still support breaking new highs, reflecting confidence in the fundamental narrative. However, the increase in posts saying 'rising this much daily' indicates obvious short-term overheating.
Technically, Hua Hong Semiconductor’s closing price of 114.600 yesterday was above all major moving averages, showing a clear short-term bullish trend, having broken through the upper Bollinger Band at 108.643, indicating strong upward momentum. However, the Relative Strength Index has risen to 80.936, a significantly overheated level, and the current price is close to the 116.500 high, making chasing less attractive.
The short-term key is whether 108.643 can hold steady. If a pullback can still maintain this level, the strong structure remains intact, and there might be opportunities to test 116.500 or even 124.000. If it falls below 108.643, it means the breakout above the upper band wasn't sustained, and one should watch for a retest of support at 102.330. At this stage, it's not weak but rather too strong, needing consolidation.
Reply to some investors' views:
@姣好的佳林_4839Take profits when you're ahead.
The current price is overheated; a phased profit-taking approach is more reasonable.
@little little potato Rising so much every day makes people think about whether they should exit.
The Relative Strength Index is already overheated; one can pay attention to whether 108.643 holds as a reference point.
@智慧的山地 Clients are still increasing their holdings, which will likely break the previous high
If it can break through 116.500, there is still an opportunity in the short term to test 124.000 again.
Based on the above analysis, the strategies for deployment can be divided into the following main approaches:
Key Deployment: 108.643 is the watershed. If it holds steady, a strong consolidation can be maintained. Breaking through 116.500 could lead to testing 124.000; falling below 108.643 requires caution for a retest of 102.330.
Strategy One | Rebound deployment after holding above 108.643
$UBHUAHO@EC2608A.C (24990.HK)$ | Strike Price 140.09 | Actual Leverage 3.9x | Mid-distance out-of-the-money, suitable for rebounding after a strong stock retreats and stabilizes again
$BIHUAHO@EC2607C.C (24321.HK)$ | Strike Price 127.00 | Actual Leverage 4.3x | Closer to the upside target, suitable for capturing short-term recovery after stabilization
$CIHUAHO@EC2606B.C (27139.HK)$ | Strike Price 128.88 | Actual Leverage 5.2x | Higher leverage, suitable for amplifying short-term rebounds after confirming support
Strategy Two | Following momentum after breaking through 116.500
$UBHUAHO@EC2608A.C (24990.HK)$ | Strike Price 140.09 | Actual Leverage 3.9x | Suitable for stable momentum following a breakout, ideal for holding until reaching the upper range
$HSHUAHO@EC2608B.C (24753.HK)$ | Strike Price 140.09 | Actual Leverage 4.0x | Balanced allocation within the same range, suitable for following momentum post-breakout
$MSHUAHO@EC2608A.C (26913.HK)$ | Strike Price 139.99 | Actual Leverage 4.2x | Greater flexibility, suitable for capturing acceleration phases after a breakout
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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Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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