Ganfeng Lithium's defense battle at the 70 yuan mark has begun, with the market waiting for a rebound while fearing a drop below 66 yuan

Recently, it has become the most typical 'high-volatility resource stock sentiment battleground' in the Hong Kong stock market. The market remains full of speculation regarding a rebound in lithium prices and expectations for the mid-year report, but the stock price itself continues to be weak, causing extreme divisions among investors. On one side, some funds believe that lithium prices have entered a reversal cycle, with the area around 70 yuan presenting the last opportunity for low absorption; on the other side, there are growing concerns that the stock price may not have fully bottomed out yet and could potentially re-enter a long-term bearish cycle.

Ganfeng Lithium closed at 73.20 yuan last Friday (the 15th), with technical signals showing 'neutral,' teetering on the edge of an oversold rebound. Compared to its peers, $TIANQI LITHIUM (09696.HK)$ closed at 54.85 yuan; $ZHAOJIN MINING (01818.HK)$ closed at 24.02 yuan, with an RSI of about 26, giving a technical signal of 'buy' (extremely oversold); $ZIJIN MINING (02899.HK)$ Closing at HKD 35.16, the RSI is approximately 43, with technical signals indicating 'neutral'. This shows that the resources sector as a whole is in a 'weak recovery' phase. Apart from gold stocks (Zijin Mining) showing extreme oversold rebound signals, lithium mining stocks (Ganfeng Lithium, Tianqi Lithium) lack strong upward momentum and are mainly relying on technical support for range-bound fluctuations.

The most core logic in the current market is lithium pricing and mid-year report expectations. A large number of bullish comments focus on the recovery of lithium carbonate prices, a rebound from the low point in lithium pricing, and the possibility of explosive profit improvement in the 2026 mid-year report. Some investors are even directly forecasting that the share price will rise above 100 yuan within three months, believing that this is merely a deliberate shakeout by major players to flush out retail investors.

In particular, phrases like 'the two golden flowers of lithium mining' reflect that there is still a significant amount of capital treating Ganfeng as one of the core stocks in a new energy resurgence. Coupled with some investors starting to think that tech stocks are nearing their peak, funds might flow back into lithium battery and resource sectors, keeping alive market hopes for a cyclical reversal.

However, the problem lies in the fact that the stock price itself remains very weak. An increasing number of people in the market are shifting from 'holding firmly' to 'fearing a breakdown.' Continuous discussions on price levels such as 66 yuan, 70 yuan, and 75 yuan indicate that market psychological defenses are gradually moving lower. Especially after the breach of 75 yuan, the market quickly shifted to looking at 66 yuan as the next support level.

This kind of sentiment is crucial because once the market begins continuously searching for support levels, it indicates that investors have shifted from expecting a rebound to preparing for deeper declines.

In terms of technical trends, Ganfeng Lithium closed at HKD 73.20 last Friday, with both daily and weekly charts showing strong sell signals, and short-term direction leaning bearish. The stock price is below the 50-day moving average of HKD 80.72 and also below the 200-day moving average of HKD 96.44, reflecting that the medium-short term and mid-long term structures remain weak.

The most critical support level currently is 70.18 yuan. This position is very close to the 70-yuan area frequently mentioned in market discussions, making it not only a technical support but also a psychological defense line. If 70.18 yuan is breached, the market could easily retest near 66 yuan. As a significant amount of bullish contracts and bottom-fishing positions are concentrated between 70 and 75 yuan, any breakdown could rapidly amplify short-term panic sentiment.

On the resistance side, 80.72 yuan is the key short-term threshold, which also coincides with the 50-day moving average. If Ganfeng fails to regain stability above 80.72 yuan, any rebounds should still be considered oversold bounces rather than a true trend reversal. Further above, 88.67 yuan will represent an important pressure zone for mid-term recovery.

The Relative Strength Index (RSI) is around 34.92, approaching the lower range, suggesting that the market is nearing oversold conditions. This explains why there have been continuous opinions recently stating 'RSI is oversold' or 'once short squeezes finish, there will be a rebound.' However, the Average Directional Index (ADX) is approximately 31.84, indicating that the downward momentum remains strong, while the Average True Range (ATR) of about 4.97 reflects significant volatility. This means that even if there’s a rebound, sharp fluctuations in the short term are highly likely.

The most common questions in the market now revolve around whether 70 yuan will hold, whether one should increase their position, and whether the current move is a washout or a genuine decline. From a technical perspective, the area near 70 yuan does start entering a significant support zone, so a technical rebound could occur anytime soon. However, if the stock price fails to return above 80.72 yuan, it would indicate that the market remains in a weak consolidation phase.

Additionally, there is a noticeable 'clash of beliefs' emerging in the market. Some investors believe the main players are deliberately shaking out weaker hands and insist on holding through the dip; others think that recent actions like the vice president's selling, foreign capital reduction, and major players exiting already signal trouble ahead. This divergence typically suggests that the market has yet to truly bottom out since true bottoms often emerge when the market reaches complete despair, not during ongoing debates.

Overall, Ganfeng currently behaves more like a high-volatility cyclical stock rather than a stable trend-following stock. If 70.18 yuan holds firm and lithium prices continue improving, the stock may have a chance to rechallenge levels above 80 yuan; however, if 70 yuan breaks down, the market could easily look toward testing near 66 yuan again. At this stage, it is more suitable to deploy positions incrementally and manage risk rather than emotionally taking large positions to catch a bottom.

Latest update (May 18 morning):

Ganfeng Lithium is currently trading at HKD 75.25, rebounding about 2.8%, temporarily moving away from the closing low of HKD 73.20. In comparison, Tianqi Lithium (09696) is trading at HKD 55.35 (up slightly by about 0.91%); this indicates that lithium mining stocks (Ganfeng, Tianqi) are experiencing synchronized technical rebounds. If Ganfeng can hold above HKD 75 and further reclaim the HKD 78 to 80 range, it will help alleviate market fears of 'breaking below HKD 70'.

Reply to some investors' views:

@馬上發財喂To rechallenge HKD 82, it needs to first break through HKD 80.72.

@232431707Clearing positions is a defensive move, given the current significant short-term volatility.

@PiuPiuuManagement and institutional selling has indeed pressured market confidence.

Based on the above analysis, the strategies for deployment can be divided into the following main approaches:

Ganfeng Lithium (1772)

Key deployment: Previous close at HKD 73.20, short-term trend remains weak; HKD 70 is a key support level. A break below could lead to a retest of HKD 65. On the upside, it needs to stabilize above HKD 78 to have a chance to improve its weak structure.

Strategy 1 | Rebound Play from Lower Levels
$SGGANFE@EC2612A.C (22878.HK)$ | Strike Price HKD 75.45 | Actual Leverage 2.8x | Near current price zone, suitable for betting on a technical rebound recovery
$UBGANFE@EC2607A.C (25556.HK)$ | Strike price 88.77 yuan | Actual leverage 5.4 times | Higher leverage, suitable for short-term rebound to amplify volatility
$UBGANFE@EC2609A.C (25276.HK)$ | Strike price 100.98 yuan | Actual leverage 4.0 times | Suitable for those optimistic about the recovery of the lithium battery sector in the medium-short term

Strategy 2 | Breakout Momentum Play
$GJGANFE@EC2607A.C (25369.HK)$ | Strike price 88.77 yuan | Actual leverage 6.3 times | Breakthrough above 78 yuan shows higher elasticity, suitable for following the trend and entering
$HSGANFE@EC2607A.C (25149.HK)$ | Strike price 88.72 yuan | Actual leverage 5.7 times | Higher sensitivity, suitable for accelerating breakout trends
$CIGANFE@EC2609A.C (22656.HK)$ | Strike price 100.88 yuan | Actual leverage 4.0 times | Suitable for deployment when an upward trend is expected to continue

Strategy Three | Deployment upon breaking through support level
$JPGANFE@EP2607A.P (25165.HK)$ | Strike price 58.48 yuan | Actual leverage 5.5 times | Suitable for capturing continued weakness after breaking below 70 yuan
$MBGANFE@EP2607B.P (25340.HK)$ | Strike price 58.43 yuan | Actual leverage 5.6 times | High-leverage product, suitable for short-term sharp declines
$HUGANFE@EP2607A.P (25288.HK)$ | Strike price 58.43 yuan | Actual leverage 5.3 times | Suitable for bearish swing trading to capture downside volatility

For more market analysis, stay tuned to Jenny's daily updates on 'Hong Kong Stock Warrants'!

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 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; asset performance should be comprehensively evaluated using other sources of information, and trading decisions should not be made solely based on this article. Please note that past performance is not indicative of future results.

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