May 11 [HK Stocks Podcast] Part 2 - Alibaba, SMIC, Li Auto
1. Alibaba-W (09988.HK): Investors observed a surge in end-of-day trading volume, indicating significant distribution by major players. Will it retreat to HKD 125? Some investors are holding call warrants with a strike price of HKD 168.98.
Alibaba is currently trading at 133.900, showing a pullback after a short-term rebound and now consolidating. The stock price remains above the 20-day line at 131.985 and the 30-day line at 128.993 but has fallen below the 10-day line near 132.420 before retreating again, reflecting weakening short-term support. The upper Bollinger Band is at 141.304, the middle band at 131.985, and the lower band at 122.666; for now, the current price holds above the middle band.
Investors observed significantly higher trading volumes in the closing market and are concerned about major players offloading shares, questioning if the stock will retreat to 125. Today’s decline accompanied by higher trading volume indeed reflects increased selling pressure, so the immediate focus is whether 131.985 can hold. If it breaks below 131.985, the next support level would be 128.993. Should 128.993 also fail, the risk of testing 125 or even 122.666 increases. In other words, 125 isn’t an immediate target but a downside area to defend once the midline and 30-day line are breached.
Investors holding call warrants with a strike price of 168.98 have adopted a more aggressive stance. The current price at 133.900 is still far from the strike price, and the stock needs to rise above 141.304 for the short-term structure to strengthen again. If the price fluctuates between 131.985 and 141.304, the call warrants could suffer from time decay. If the price falls below 131.985, the position’s risk will increase further.
Overall, the short-term key level for Alibaba is at 131.985. If it holds above this level, it still represents consolidation above the midpoint; if it breaks below, the next support levels to watch are 128.993 and then near 125. To see an improvement in trend, it needs to break back above 141.304; otherwise, at this stage, the rebound should not be considered a renewed sign of strength. $BIALIBA@EC2608E.C (26562.HK)$$HSALIBA@EP2607A.P (26071.HK)$$BPALIBA@EP2607A.P (20561.HK)$$HS#ALIBARC2610J.C (56792.HK)$
2. SMIC (00981.HK): Investors are worried about chasing the price higher and are asking where they should enter on a pullback. Some investors are determined not to sell until the price reaches 80, holding call warrants with an exercise price of 80.05.
SMIC is currently trading at 76.600, showing a clear short-term uptrend as the price is now above the 10-day line at 71.550, the 20-day line at 65.558, and the 30-day line at 61.645, nearing the upper Bollinger Band at 78.923, indicating a strong rebound into overbought territory. The relative strength index (RSI) is around 71.598, suggesting strong momentum, but it's entering overheated territory, increasing risks for chasing higher prices.
Worried about chasing highs, investors are asking where to re-enter. Technically, they may look at the 10-day line around 71.550. If the stock pulls back from the highs but holds above 71.550, it remains a healthy correction. A break below 71.550 brings the 20-day line at 65.558 into play. It’s unwise to chase prices near the resistance at 78.923; waiting for a pullback to support levels is more reasonable.
As for those who won’t let go until the price hits 80 and hold call warrants with a strike price of 80.05, the critical level to watch is 78.923. If SMIC can break and stabilize above 78.923, it might have the potential to challenge 80. Otherwise, the stock may oscillate at the current high level, exposing the call warrants to time decay and volatility risks.
Overall, SMIC remains relatively strong in the short term but is approaching a resistance zone. Above, first resistance lies at 78.923, then 80 upon a breakout. For pullback entry points, consider 71.550 initially, and for a safer bet, look near the 20-day line at 65.558.
3. Li Auto-W (02015.HK): Investors mentioned that the price failed to break through 75 three times, asking if they can consider shorting using Put options?
Li Auto is currently trading at 73.850, with short-term range-bound fluctuations before another attempt to test resistance. The stock price is currently above the 10-day moving average at 69.500, the 20-day moving average at 70.933, and the 30-day moving average at 70.902, indicating a relatively stable structure. However, the upper level at 75.151 corresponds to the upper Bollinger Band, which also aligns with the 75-level resistance area mentioned by investors.
Technically, the 75-level has indeed failed multiple times to break through effectively, making it a clear short-term resistance. If the stock price attempts to test near 75.151 again but fails to stabilize, forming a false breakout or leaving an upper shadow, the logic for taking a Put option based on resistance reversal holds. However, this type of positioning assumes 'non-breakout' as a premise, not merely presupposing a pullback due to past resistance.
It’s worth noting that the current stock price remains above the moving averages, with a Relative Strength Index (RSI) of approximately 69.031, showing strong momentum but not overheated, suggesting the market may still have room for another breakout attempt. If the stock price breaks through and stabilizes above 75.151 with increased volume, the previous resistance will turn into support, significantly amplifying the risk for short positions taken via Puts.
On the downside, initial support can be seen around 70.933, which is where the middle Bollinger Band overlaps with the 20-day moving average. If this level is breached, the next support zone lies between 69.500 and 70.902. This is also the potential target area to consider when deploying reversal strategies.
Overall, the 75 yuan mark can act as a key short-term watershed. Before a breakout occurs, it is reasonable to consider Put options when weakening signals appear in the resistance zone; however, once a breakout happens and stabilizes above, bearish bets should be abandoned immediately to avoid being squeezed by a reversal in momentum. $MSLIAUT@EC2610A.C (27494.HK)$$SGLIAUT@EC2610A.C (27552.HK)$$HS#LIAUTRC2612B.C (59579.HK)$$UB#LIAUTRC2608E.C (54694.HK)$
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 TECH Index (800700.HK)$$Hang Seng Index (800000.HK)$$Hang Seng China Enterprises Index (800100.HK)$
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