May 6th [HK Stocks Podcast] Part-1 - Hang Seng Index, Hong Kong Exchange, Huahong,
1. Hang Seng Index: Investors who are optimistic should pay attention to the bull certificate with a stop-loss level at 25,294 points. Pessimistic investors consider it just a bearish fluctuation and continue holding overnight bear certificates, with a stop-loss level at 26,333 points.
The current price of the Hang Seng Index (May 6th) is 26,213.78. In the short term, it remains above the watershed level of 26,009.06 but is constrained by the upper Bollinger Band at 26,646.19, while finding primary support at 25,553.93. The current price is also higher than the 10-day moving average at 25,975.86, the 20-day moving average at 26,009.06, and the 30-day moving average at 25,666.61. Although the structure isn't weak, before breaking through 26,646.19, this can only be considered a strong consolidation within a range and not an official start of a new one-way uptrend.
Technically, the Hang Seng Index rose by 315.17 points today, closing at 26,213.78, with a turnover of 304.737 billion. The rise in price was accompanied by increased trading volume, indicating that short-term buying pressure persists. However, the index is currently between 26,009.06 and 26,646.19, which isn’t far from the upper resistance. If it fails to break through 26,646.19, short-term volatility could still occur. The Relative Strength Index (RSI) is approximately 58.255, showing relatively strong momentum but not overheated, suggesting the market still has room for upside tests, though the reward-risk ratio depends on whether 26,009.06 can hold steady.
For short-term strategy, 26,009.06 is the most important watershed level. If the Hang Seng Index holds firm above this level, a preference for bullish positions can be maintained in the short term, with the next observation point being 26,646.19; if it falls below 26,009.06, then there is a risk of testing 25,553.93, at which point long positions need to manage their stakes carefully and avoid excessive aggressiveness.
For optimistic investors, it is advisable to monitor bull certificates with a call price at 25,294 points. The logic is to use the support near 25,553.93 as a defense line. Given that the call price is still a certain distance from the current price, this strategy is suitable for those who believe the Hang Seng Index can hold above 26,009.06 and advance towards 26,646.19 in the short term. However, the risk with bull certificates is that if the Hang Seng Index falls below 26,009.06, the market may quickly retest lower support levels, causing significant volatility in leveraged products.
For bearish investors who consider this merely a temporary rebound and choose to hold bear certificates overnight with a call price at 26,333 points, this strategy carries significantly higher risk. With the Hang Seng Index currently at 26,213.78, which is very close to 26,333 points, any further upward movement could trigger the call zone. Unless one believes the Hang Seng Index cannot break above the current level and will immediately retreat, such bear certificates near the call price are unsuitable for overnight risk exposure.
Overall, the Hang Seng Index is not showing strong unilateral momentum in the short term but has also not shown clear weakness. Above 26,009.06, the situation remains relatively stable, and 26,646.19 is the key level for confirming a breakout. Long positions can continue using the watershed level as a basis for deployment; for short positions, bear certificates near 26,333 points carry the risk of being too close, making them more suitable for extremely short-term plays rather than holding overnight.
Investors who believe trading volume is starting to increase see this as a good opportunity to buy Hong Kong Exchange (00388.HK) and have purchased call warrants with an exercise price of 518.5 HKD.
The current price of Hong Kong Exchange (as of May 6) is 421.200, which has recently regained the 20-day line at 412.560, the 30-day line at 405.593, and the 10-day line at 414.660. After rebounding from earlier lows, the trend is now consolidating with strength. The current price is close to the upper Bollinger Band at 421.045, indicating the stock has entered a short-term resistance zone. If it can stay above 421.045, the rebound structure may extend further; otherwise, it is likely to consolidate around 414.660 to 412.560.
Technically, Hong Kong Exchange rose by 3.000 HKD today, closing at 421.200, with a trading volume of 3.72975 million shares. The stock remains above several major short-term moving averages, indicating stability. However, the Relative Strength Index is approximately 65.474, showing that momentum has strengthened but is approaching overbought territory. This suggests that while the short-term outlook is not weak, the reward-to-risk ratio for entering now is lower than during the early stages of a rebound from a low point. It is crucial to observe whether the price can truly stabilize near 421.045.
The current watershed level is 421.045. If the stock can remain above this level, there is potential for further testing of the area near 425.983. If it falls back below 421.045, observation of support at 414.660 and 412.560 will be necessary. A more conservative short-term strategy is to wait for confirmation that the stock can hold above 421.045 before considering further upside. If the price only briefly breaks above but fails to stabilize, it could easily turn into high-level fluctuations.
Investors who believe that increasing trading volume presents a good opportunity to buy Hong Kong Exchange align with the logic of its trading dynamics. The stock price of Hong Kong Exchange is heavily influenced by market turnover. If overall market trading volume continues to rise, it would indeed support its short-term valuation and trading sentiment. However, technically, the current price is already close to the upper Bollinger Band, making it less ideal for entry at higher levels. Therefore, the focus should not solely be on increased trading volume but on whether the price can stabilize above 421.045.
As for investors holding call warrants with an exercise price of 518.5 HKD, their strategy reflects optimism about a further rebound in Hong Kong Exchange. Since the exercise price is significantly higher than the current price, the product offers high elasticity but also requires sustained upward momentum. If Hong Kong Exchange can stabilize above 421.045 and move towards 425.983, there is still room for short-term speculation on the call warrants. However, if the stock price retreats to the range between 414.660 and 412.560, the call warrant prices may weaken due to stock pullbacks and time decay.
Overall, Hong Kong Exchange's short-term structure is relatively strong but has reached a resistance level. Optimistic investors can continue using 421.045 as the first reference line—only by stabilizing above this level can an upward trend be extended. If 421.045 is breached, it would not be wise to equate increased market trading volume directly with a guaranteed stock price rise. Instead, it would be prudent to first observe the support at 414.660 and 412.560.
3. Hua Hong Semiconductor (01347.HK): Investors are asking if the stock price, which has reached a new high, can reach HKD 140. Some investors are deploying bearish warrants with a recovery price of HKD 140.
Hua Hong Semiconductor's current price (May 6) is HKD 130.100, showing strong short-term momentum. The share price has broken through the upper Bollinger Band at HKD 126.946 and is above the 10-day moving average of HKD 112.185, the 20-day moving average of HKD 101.867, and the 30-day moving average of HKD 95.755, indicating a strong breakout pattern. Today, it rose by HKD 11.100, an increase of 9.33%, with a trading volume of 45.3684 million shares, reflecting significant buying interest.
Technically, after reaching a new high, whether the stock can reach HKD 140 depends on whether it can hold steady above HKD 126.946. The current price of HKD 130.100 is already above the upper band, with strong short-term momentum. The Relative Strength Index is around 80.618, indicating a very strong upward trend but also entering an overheated zone. If the price can hold above HKD 126.946 and continue to see supportive trading volumes, there is potential for it to advance to HKD 135.600 or even HKD 140. However, if it falls below HKD 126.946, be cautious of pullbacks after the breakout, potentially testing support near HKD 112.185.
For investors asking 'Is there a chance it could reach HKD 140?', the answer is yes, but they should not focus solely on the target price. At this stage, Hua Hong Semiconductor’s main advantage is that funds are still flowing in after breaking new highs. The main risk is that the Relative Strength Index has risen to about 80.618, signaling clear short-term overheating. If you have held since the lower levels, you can use HKD 126.946 as a short-term defensive line; however, if you are newly entering, the reward-risk ratio is less favorable than before the breakout, so waiting for a pullback to observe further support would be more suitable.
As for investors deploying bearish warrants with a recovery price of HKD 140, this strategy is betting on a pullback from high levels, but the risk is quite high. With the current stock price at HKD 130.100, the uptrend is still continuing, having broken through the upper Bollinger Band. If market sentiment continues to drive the price higher towards HKD 135.600 or even HKD 140, the bearish warrants with a recovery price of HKD 140 will face significant pressure. Such strategies are not suitable for heavy positions and should not be held against the trend merely because the stock has risen sharply.
Overall, Hua Hong Semiconductor shows a strong short-term breakout but is now in a high-volatility, high-risk zone. Bulls may focus on whether HKD 126.946 can hold; if it does, there is potential to challenge HKD 135.600 to HKD 140. Bears using bearish warrants with a recovery price of HKD 140 must acknowledge that this is a contrarian position, and significant pullback risks only arise if the price breaks below HKD 126.946.
Reminder: This article does not constitute any investment advice.
This article is for reference only and does not constitute any investment advice. Market data, opinions, and analysis presented may change without prior notice. We assume no responsibility for any losses or damages resulting from reliance on the information in this article. Technical analysis only indicates whether certain technical conditions are met; other information should be considered to comprehensively assess asset performance. Do not make trading decisions based solely on this article.
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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