May 13 [HKEX Podcast] Part-1-Hang Seng Index, JD.com, AAC,

1. The Hang Seng Index's short-term rebound remains intact, but neither the bulls nor the bears should be overly aggressive.

The current price of the Hang Seng Index is 26,388.44, and the short-term rebound structure remains intact. The index is above the 10-day line at 26,225.98, the 20-day line at 26,163.61, and the 30-day line at 25,908.19, indicating that the short-term focus has returned above the key moving averages. The middle band of the Bollinger Bands is at 26,163.61, the upper band at 26,667.84, and the lower band at 25,659.38. The current price is above the middle band but has not yet broken through the upper band, so while the rebound momentum is strong, it cannot be considered an official breakthrough.

Technically, the range between 26,163.61 and 26,225.98 is the first level of short-term support and a position that long positions must defend. As long as the Hang Seng Index stays above this area, the rebound structure will remain unbroken, and there is still a chance to test 26,667.84 in the short term. A breakout and stabilization above 26,667.84 would confirm further strengthening momentum. However, the Relative Strength Index (RSI) is about 57.952, indicating strength but not overheating, suggesting that the current rebound is moderate rather than a one-sided rapid surge.

Bullish investors believe that the market will soar by 500 points tomorrow and are holding extremely bullish warrants with a recovery price of 26,216 overnight. This setup is highly flexible but also very risky because 26,216 is only about 172 points away from the current price of 26,388.44, which is very close to the 10-day line at 26,225.98. If the index tests the area near the 10-day line early on, the related bull warrants could be called back. Not being called back after three days simply means that the recovery price hasn't been touched yet and doesn't imply reduced risk going forward. To continue holding, the focus should not be on how much upside potential there is, but whether 26,216 remains secure.

Bearish investors holding far-out bear warrants with a recovery price of 28,200 points believe that the Hang Seng Index will fall back to 26,000 points. This view needs to be analyzed separately. Technically, if the Hang Seng Index falls below the range of 26,163.61 and 26,225.98, there is indeed a chance of a short-term pullback. Below this, 25,908.19 could be the first support level, followed by 25,659.38. The area around 26,000 points is a reasonable retracement observation level but not yet a confirmed downside target at this stage. As long as the Hang Seng Index remains above the 20-day and 10-day moving averages, a bearish setup should still be considered as waiting for weakness rather than an already confirmed downturn.

Overall, the Hang Seng Index is currently at a position where bullish and bearish views diverge. For the bulls, the focus is whether it can hold above 26,163.61 to 26,225.98 and further challenge 26,667.84. For the bears, they need to wait for a breakdown below this support zone before the probability of a retest at 26,000 points increases. At this stage, the biggest risk isn't about direction judgment but that the product's distance from the recovery price is too close. Overnight risk for ultra-bull warrants with a recovery price of 26,216 points is relatively high. While far-out bear warrants have more distance, if the index doesn’t break below the support, the rebound may continue to erode their value.

JD.com has shown a sharp short-term rally, but those chasing the uptrend should be mindful of overheating risks.

JD.com is currently trading at 128.200, surging 8.28% today, indicating a clear strengthening in the short-term trend. The stock price is now above the 10-day moving average at 118.580, the 20-day moving average at 119.400, and the 30-day moving average at 116.528. It has also broken through the upper Bollinger Band at 125.680, signaling a shift from consolidation to breakout. The current price is near the high of 128.300, showing strong buying momentum but also entering a higher valuation range.

Investors think that holding above 125 could signal further upside, which has technical support. Since 125.680 is currently the upper Bollinger Band, if JD.com can stay above 125.680, it means the breakout isn’t just a one-day surge but could sustain its strength. The next key level to watch would be 128.300. If it breaks through and stabilizes above that, the short-term target could then be set at 133.

However, whether 133 can be directly targeted depends on the Relative Strength Index (RSI). JD.com’s RSI is currently around 87.032, which is significantly high, reflecting strong short-term momentum but also overbought risks. In other words, 133 can serve as an extended target after the breakout, but shouldn't be viewed as a guaranteed level. If trading volume sustains after breaking 128.300, the likelihood of reaching 133 increases; otherwise, the price might retreat to consolidate near 125.680.

Investors holding bull warrants with a recovery price at 112 have a relatively larger safety margin compared to those holding closer-priced warrants. However, the effectiveness of the bull warrant strategy still depends on whether the stock price can hold above 125.680. If JD.com stays above 125.680, the bull warrant position can align with the upward trend; if it falls below 125.680, the breakout momentum weakens, and the focus should shift to whether it can stabilize between 119.400 and 118.580.

Overall, JD.com has experienced a short-term breakout, with 125.680 being the most critical inflection point. Staying above this level could allow for a potential test of 128.300, followed by 133. If it falls back below 125.680, caution is needed for a possible reversal into profit-taking. The stock is not weak at present, but with a relatively high RSI, the reward-to-risk ratio for entering now is less favorable than during the initial stages of the breakout.

AAC Technologies shows a strong breakout, but levels between 46 and 50 need to be assessed in stages.

AAC Technologies is currently trading at 43.600, soaring 12.08% today, clearly strengthening in the short term. The stock price is now above the 10-day moving average at 38.744, the 20-day moving average at 38.411, and the 30-day moving average at 37.316, while breaking through the upper Bollinger Band at 41.672, indicating a transition from consolidation to breakout. Trading volume has also significantly increased, supporting the sharp rise, showing that this breakout is backed by capital inflows.

Investors are asking if the stock can rise to between 46 and 50 dollars. Technically, 46 dollars can be considered the first extension target after a breakout, but the premise is that AAC Technologies needs to hold steady above 41.672. If the share price can remain above the upper Bollinger Band, the short-term uptrend may continue, with the next opportunity being a gradual challenge towards 46 dollars. However, 50 dollars represents a more aggressive target, requiring the price to first rise above 46 dollars and stabilize before further upside potential can be considered.

It should be noted that the Relative Strength Index (RSI) is approximately 78.996, which indicates a relatively high level, reflecting strong short-term momentum but also suggesting an increasing risk of overheating. The current price of 43.600 has already moved significantly away from both the 10-day and 20-day moving averages, and if the upward momentum cannot be sustained quickly, the stock price might consolidate at higher levels. In other words, the current stage is not weak, but rather shows increased risk following a strong breakout.

Investors holding call warrants with an exercise price of 49.99 dollars are positioning for the share price to continue challenging the 50-dollar mark. This product relies heavily on further share price increases. If AAC Technologies can hold firm above 41.672 and gradually approach 46 dollars, the call warrant will maintain its elasticity; however, if the share price falls back below 41.672, the strength of the breakout will weaken, and volatility risks for the call warrant will rise significantly.

Overall, AAC Technologies has experienced a short-term breakout, with 41.672 currently being the most important threshold. Holding above this level, the short-term target would first be 46 dollars; once surpassing 46 dollars, the focus would shift to around 49.99 to 50 dollars. However, if it falls back below 41.672, a pullback after the breakout must be guarded against. At this stage, while the stock appears strong, one should not overlook the heightened volatility risks associated with an elevated RSI.

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 assume no responsibility for any loss or damage resulting from reliance on the information in this article. Technical analysis only indicates whether certain technical conditions are met; a comprehensive evaluation of asset performance should combine other information, and trading decisions should not be made solely based on this article. Please note that past performance is not indicative of future results. Follow Jenny’s insights on Hong Kong stock warrants for more professional analysis. $Hang Seng Index (800000.HK)$$Hang Seng TECH Index (800700.HK)$$Hang Seng China Enterprises Index (800100.HK)$

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