After SMIC broke through 74.253, it entered a strong zone. There is potential to reach 80, but the risk of chasing higher has significantly increased.

SMIC's current price is 77.1 yuan, with a clearly strong short-term structure. The stock price is now above the upper Bollinger Band at 74.253, the middle Bollinger Band at 62.728, the 10-day line at 67.085, and the 30-day line at 59.630, indicating that this is not a normal rebound but a strong breakout pattern. The latest trading volume has also significantly increased, supporting the rise in stock price, reflecting strong capital inflow, and showing that the market's interest in SMIC has noticeably risen in the short term.

However, the most important issue at this stage is not whether SMIC is strong or not, but whether it can stabilize after breaking through the upper band. 74.253 is currently the key level; if the stock price stays above it, the strong pattern can be maintained, and the next resistance level would be 80.100. If it falls below 74.253, it means the breakout failed to hold, and in the short term, one should be cautious about a pullback to test 67.085 and 62.728. Since the stock price has surged past the upper band, the value of chasing in now is not as good as at lower levels, so one should avoid treating the breakout as a risk-free upward move.

The Relative Strength Index (RSI) is approximately 80.431, entering the overheated zone. This indicates very strong momentum, but also suggests that short-term profit-taking pressure will increase. Strong stocks can remain overbought, but volatility typically increases after becoming overbought. If the stock price can consolidate above 74.253, it reflects healthy strength; if it quickly falls back below 74.253 after spiking, one should be cautious of a false breakout and potential profit-taking at high levels.

Among investor comments, bullish views are mainly centered around rising prices and volumes, healthy pullbacks, and entry timing. These perspectives have some technical basis because SMIC's recent rally does have trading volume support, it’s not a rise without volume. The judgment that 'pullbacks remain healthy' is especially worth noting, as after a strong breakout, the most important thing isn’t daily surges, but whether the breakout level can hold during pullbacks. As long as 74.253 doesn't break, any pullback might just be part of a strong consolidation.

However, 'it should be time to enter the market' requires more caution. If you have already positioned near 67 or lower earlier, now is the time to hold and observe the continuation of the breakout; but if you are only entering now, the short-term upside to 80.100 is not too far, while a drop back to 67.085 poses a clear retracement risk. Therefore, those without positions should reasonably wait for a pullback above 74.253 or confirm another high-volume breakout above 80.100 before making a judgment, instead of blindly chasing in overheated zones.

Bearish comments are concentrated around keywords like 'weak,' 'plummet,' 'run fast,' 'lightning rod,' and 'end of the rally.' Such comments reflect that some investors are still affected by past volatility and lack trust in rapid surges. However, from the current technical structure, SMIC cannot be simply categorized as weak because the stock price has broken through the upper Bollinger Band with significant trading volume. Judging the rally as over just because of past plunges could lead to exiting strong stocks prematurely.

Of course, the bearish warnings about risks at higher levels are not entirely without merit. The Relative Strength Index (RSI) is already showing overbought conditions, and if the stock price spikes and then closes with a long upper shadow or falls below 74.253, there will indeed be profit-taking pressure in the short term. What truly matters is not emotional language but whether the price holds its level. Holding above 74.253 means the rally continues; falling below 74.253 calls for guarding against a failed breakout.

The most relevant comments align closely with the core issue: 'whether the closing price can stabilize above the key level' is currently the most crucial judgment. SMIC has the potential to test 80.100, but it must first confirm whether 74.253 can turn into support. Comments like 'a better low point before earnings reports would be ideal' reflect investors hoping for safer entry points, which is more rational than chasing at high levels. 'Entering half a position and waiting for a pullback to add more' is also a prudent approach since scaling in during overheated conditions is better than entering with full weight all at once.

Overall, SMIC is currently experiencing a strong breakout, but it's not a low-risk opportunity to chase. The clearest trading framework is this: holding above 74.253 maintains short-term strength with a target of 80.100; falling below 74.253 requires guarding against a retest of 67.085 and 62.728; a confirmed breakout above 80.100 with sustained volume allows for discussion of further upside. Current holders can continue observing the trend, using 74.253 as an important defensive line; non-holders should not rush to chase due to rising prices and volumes but instead wait for a pullback confirmation for a safer entry.

The core of SMIC’s current rally is that strength has emerged, but the market still needs to verify whether it can stabilize. Bullish sentiment has a foundation, but bearish views should not come too early; the real answer lies at 74.253. Holding above it indicates a strong pullback; failing to do so means a failed breakout.

SMIC (00981) Key Focus: Holding above 74.253 maintains strength targeting 80.100; falling below 74.253 requires guarding against a retest of 67.085 and 62.728.

Strategy 1 | Hold above 74.253 and follow the breakout momentum.

25682 | Strike Price 80.05 | Actual Leverage 5.9x | Close to next resistance, suitable for capturing short-term momentum towards 80 after confirming the breakout above the key level.

20113 | Strike Price 80.05 | Actual Leverage 6.1x | Faster response, suitable for pursuing the first leg of continued upward momentum with supportive trading volume.

Strike price 80 | Actual leverage 5.7x | Slightly lower leverage, suitable for a bullish strategy that is not overly aggressive

$UB-SMIC@EC2607A.C (25682.HK)$$HS-SMIC@EC2607A.C (20113.HK)$$BP-SMIC@EC2608A.C (19950.HK)$

Strategy Two | Buy on dip near 74.253

Strike price 78.93 | Actual leverage 3.5x | Closer to current price, suitable for stable rebound plays after a pullback breakout

Strike price 77.88 | Actual leverage 4.2x | Suitable for when the stock price stabilizes and moves towards 80 again; balanced elasticity

Strike price 77.77 | Actual leverage 4.5x | More direct response, suitable for short-term follow-up after confirming support

$UB-SMIC@EC2612A.C (26841.HK)$$BI-SMIC@EC2609D.C (27769.HK)$$CT-SMIC@EC2609A.C (19838.HK)$

Strategy Three | If it falls below 74.253, shift to weaker hedging

Strike price 54.95 | Actual leverage 3.2x | Far out-of-the-money but with medium-term time value; suitable for defensive hedging if the breakout level is breached

Strike price 55 | Actual leverage 3.7x | Higher leverage, suitable for capturing continued decline once weakness is confirmed

Strike price 52.5 | Actual leverage 7.7x | Aggressive hedging tool, suitable for use during an accelerating downtrend; premature deployment not recommended

$UB-SMIC@EP2703A.P (28528.HK)$$CI-SMIC@EP2703A.P (28108.HK)$$CT-SMIC@EP2608A.P (19930.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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