May 6th [HK Stocks Podcast] Part-2-Baidu, Tencent, AIA

1. Baidu Group-SW (09888.HK): Investors believe there is an opportunity to challenge the range of HKD 180-200 after earnings, holding a call warrant with a strike price of HKD 151.21.

Baidu's current price (May 6) is HKD 131.600, showing a significant rebound with the stock now trading above the 10-day moving average at HKD 123.040, the 20-day moving average at HKD 119.290, and the 30-day moving average at HKD 116.110, approaching the upper Bollinger Band at HKD 132.177. The stock rose by HKD 6.200 today, gaining 4.94%, with a trading volume of 22.19 million shares. The increase in trading volume during the uptrend reflects improved short-term support.

Technically, HKD 132.177 is currently the most important resistance and threshold. If Baidu can break through and stabilize above HKD 132.177, the short-term structure may shift from a rebound to a breakout, with the next step being to observe highs around HKD 133.300; if it fails to hold above HKD 132.177, the stock could retreat to consolidate between HKD 123.040 and HKD 119.290. The relative strength index is approximately 76.156, indicating strong momentum but nearing overbought territory, suggesting rising risks for chasing higher prices.

Investors believe there is an opportunity to challenge the range of HKD 180-200 post-earnings, which is a relatively aggressive view. From the current technical position, Baidu does show signs of strengthening in the short term, but at the current price of HKD 131.600, it is still far from HKD 180-200. It needs to first confirm breaking through HKD 132.177 and gradually overcome higher resistance levels. For now, a more reasonable judgment would be to first assess whether the price can stabilize above the upper Bollinger Band, rather than immediately viewing HKD 180-200 as a short-term target.

As for holding call warrants with an exercise price of 151.21, the direction aligns with a bullish view on Baidu breaking through resistance. However, the exercise price is higher than the current price, so the product requires a strong upward movement in the underlying stock. If Baidu can stabilize above 132.177 and continue to rise, the call warrants still have room for speculation; but if the share price fails to break above the upper rail and retreats, the call warrants will be affected by the underlying stock's pullback and time decay, leading to higher volatility.

Overall, Baidu’s short-term structure remains strong, but it has already reached a key resistance zone. Bullish investors can continue to use 132.177 as the confirmation level — only a sustained breakout above this level would justify further upside expectations. If it falls below 123.040, the rebound momentum will significantly weaken.

2. Tencent (00700.HK): Investors ask at what level they can consider buying on the dip? Some investors are holding bearish contracts with a stop-loss level of HKD 506, planning to close their positions once the stock falls to around HKD 400.

Tencent’s current price is 463.000, and the short-term trend remains weak. The share price is below the 10-day moving average of 480.020, the 20-day moving average of 493.620, and the 30-day moving average of 494.623, while also nearing the lower Bollinger Band at 458.057, reflecting that it is still within a downtrend channel. Today, it dropped by 9.200, with a trading volume of 44.3672 million shares. The increased trading volume amid the decline indicates selling pressure persists.

Technically, 458.057 is the nearest support level, while 460.200 serves as a recent low reference. If the share price can hold above the 458.057 to 460.200 range, there may be opportunities for a short-term technical rebound; however, if this range is broken, the trend will weaken further, requiring new support levels to be identified. The Relative Strength Index (RSI) is approximately 26.140, approaching oversold territory, indicating significant short-term declines. However, being oversold does not necessarily mean an immediate bottom — confirmation from a rebound signal is still needed.

For investors asking 'at what price should I buy?', a more prudent approach is not simply trying to guess the bottom but first observing whether 458.057 to 460.200 can hold firm. If the share price stabilizes in this range and rises back above 480.020, the risk-reward ratio for entering would be better. Entering without clear stabilization signals, simply because of a large drop, still carries high risk.

As for investors holding bearish contracts with a stop-loss price of 506 and planning to close positions when the share price reaches 400, their strategy aligns with the current weak market sentiment. Since the current share price is 463.000, there is still some distance from the 506 stop-loss price, so short-term pressure is not immediate. However, if Tencent rebounds near 458.057 to 460.200, the price of bearish contracts will face pressure, especially if the share price moves back above 480.020, where short positions will need to start managing risk.

Overall, Tencent remains in a weak pattern, with 458.057 to 460.200 being the first critical range. Investors looking to enter should not rush to predict a bottom but instead wait for signs of stabilization or a move back above 480.020. Investors holding bearish contracts can continue to monitor whether the downtrend persists, but if the share price breaks above 480.020 again, it would no longer be advisable to solely wait for 400.

3. AIA (01299.HK): Investors ask if there is pressure at HKD 88 and whether they should consider Put options?

AIA’s current price (May 6) is 87.450, showing a notable short-term rebound. The share price is now above the 10-day moving average of 84.230, the 20-day moving average of 84.940, and the 30-day moving average of 85.073, shifting the trend from a recovery from lows to a consolidation phase with strength. However, the current price is near 88, with the upper Bollinger Band at 89.650 just above, meaning the short-term trend is starting to enter a pressure zone.

Technically, there is some pressure at HKD 88 as the share price has rebounded recently and approached the upper side of the previous consolidation zone. The relative strength index stands at approximately 75.740, indicating strong momentum but nearing overheating. If the stock fails to break through and hold above HKD 88, there may be a short-term pullback to test support in the range of HKD 85.073 to 84.940. However, if it successfully breaks through HKD 88 and moves towards HKD 89.650, the risk for short positions will significantly increase.

For investors asking 'whether they should Put,' at this stage, it should only be considered for short-term profit-taking, not as a clear sign of weakness. AIA's stock remains above key short-term moving averages, and its structure isn't weak yet. The probability of success for a Put increases only if the stock price clearly faces resistance near HKD 88 and falls back below HKD 85.073. If the stock stays above HKD 85.073 to HKD 84.940, short positions could easily be eroded by rebounds.

Overall, there is pressure at HKD 88, but it alone does not justify initiating a Put position. A more prudent approach would be to consider short-term short positions if AIA fails to stabilize above HKD 88 and retreats. If the stock breaks through HKD 88, the next resistance level would be at HKD 89.650, where risk control for Put strategies becomes essential.

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 analyses contained herein may change at any time without prior notice. We are not responsible for any losses or damages caused by reliance on the information in this article. Technical analysis only indicates whether certain technical conditions are met and should be used alongside other data for a comprehensive assessment of asset performance; trading decisions should not be made solely based on this article. Note that past performance is not indicative of future results. Follow Jenny’s HK warrants for more professional insights. $Hang Seng Index (800000.HK)$$Hang Seng TECH Index (800700.HK)$$Hang Seng China Enterprises Index (800100.HK)$

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