SMIC (00981) is currently at HKD 68.45, with a buy signal on the daily chart and a strong buy signal on the weekly chart; short-term outlook is neutral with volatility.

The current market sentiment for SMIC (00981) is quite typical: on one side, optimism driven by earnings and trading volume, on the other, concerns over profit-taking triggered by high-volume pullbacks from elevated levels. Investors are not lacking in confidence, but rather exhibit both confidence and fear simultaneously. Bulls argue that improving performance, upward guidance on gross margin, increased trading volume, and net capital inflows indicate SMIC still has upside potential. Bears, however, see the large bearish candlestick with high volume as a distribution signal, fearing that the short-term rally may simply be a setup to trap buyers on good news.

Technically, SMIC is now trading at HKD 68.35, with a buy signal on the daily chart and a strong buy signal on the weekly chart, though the short-term direction remains neutral with some volatility, rather than a decisive breakout. This is important because, despite strong bullish sentiments such as 'big Monday surge,' 'break through 79,' or 'targeting 128 this year,' technical indicators still point more toward consolidation at higher levels rather than confirming an aggressive new uptrend.

In terms of support levels, HKD 66.51 and HKD 61.71 are currently significant defensive lines. If the stock price can hold above HKD 66.51, it may have the opportunity to challenge higher levels after a short-term consolidation. However, if it breaks below HKD 66.51 and subsequently HKD 61.71, the short-term structure will deteriorate noticeably. On the resistance side, HKD 75.79 is the key pressure level above. If it cannot break through effectively, it would be premature to assume that a one-way uptrend has already begun.

The Relative Strength Index (RSI) is around 69.78, already nearing the overheated zone, indicating that the stock has momentum, but the risk of chasing the stock is also high. The ADX is approximately 26.36, showing that trend strength is beginning to emerge, while the ATR is around 4.64, reflecting significant volatility. This explains why there are conflicting opinions in the market such as 'diamond bottom,' 'follow institutional buying,' and 'big surge on Monday,' versus 'profit-taking,' 'clearing positions,' and 'large-volume sell-off at highs.'

The most frequently asked questions by retail investors currently are whether to hold stocks over the weekend, why capital inflows aren’t rising, and whether it’s a good time to buy the dip. In the short term, SMIC isn’t a stock that can’t be traded, but it is more suitable for short-term range trading rather than emotionally chasing highs. If the price can stabilize near 71 yuan and then break above 75.79 yuan, clearer conditions for an upward trend will emerge. However, if the rebound weakens and falls back to around 66.51 yuan, caution is needed as the market may shift from volatility to weakness.

Overall, SMIC isn’t a weak stock, but at this stage, it’s not a risk-free buying opportunity either. Positive earnings and capital flow prospects keep the market interested in holding the stock, but increased volatility at higher levels also raises concerns about potential profit-taking. The short-term strategy should focus on range trading, defending at 66.51 yuan while looking for a rebound, with a confirmed breakout occurring only above 75.79 yuan. If it breaks below 61.71 yuan, risk must be reassessed.

@Hong Kong Stock Research Society@港股研究社If the industry’s most difficult phase has passed, SMIC's mid-term narrative will improve, but the short-term remains restricted by technical positions.

@WiseLori@賢慧的羅利If it encounters resistance at HK$75.79, the risk of a closing retreat still exists.

@A small goal.@一個小目標It has not yet been proven that HK$70 is the diamond bottom; whether it holds steady at HK$66.51 needs to be observed.

SMIC (0981) Key Deployment

Strategy 1 | Buy on Dip

19350 | Strike Price: HK$69.04 | Actual Leverage: 4.4x | Near par value, suitable for gradual accumulation after pullback; reacts directly to underlying stock movements.

19562 | Strike Price: HK$68.93 | Actual Leverage: 4.0x | Longer time decay, suitable for medium- to short-term holding while waiting for continued rebound.

26841 | Strike Price: HK$78.93 | Actual Leverage: 3.7x | Milder leverage, suitable for conservative deployment in the semiconductor sector recovery.

$UB-SMIC@EC2609A.C (19350.HK)$$UB-SMIC@EC2610A.C (19562.HK)$

Strategy 2 | Breakout Momentum Play

25682 | Strike Price: HK$80.05 | Actual Leverage: 6.9x | Higher sensitivity after breaking through HK$75, suitable for momentum buying.

28641 | Strike price 83.93 yuan | Actual leverage 4.2 times | Suitable for expecting a gradual upward trend while retaining some time value

25671 | Strike price 98.15 yuan | Actual leverage 5.1 times | Higher strike price, suitable for those optimistic about the renewed rise in semiconductor speculation

$UB-SMIC@EC2610B.C (25671.HK)$$UB-SMIC@EC2611A.C (28641.HK)$

Strategy Three | Deployment upon breaking through support level

20320 | Strike price 52.45 yuan | Actual leverage 8.5 times | High-leverage put warrants, ideal for capturing sharp declines after breaking support levels

28854 | Strike price 62.58 yuan | Actual leverage 3.8 times | Suitable for medium-short term bearish strategies, with relatively slower time decay

19737 | Strike price 49.79 yuan | Actual leverage 6.0 times | High volatility elasticity, suitable for short-term use during periods of accelerating weakness

$UB-SMIC@EP2609B.P (19737.HK)$$UB-SMIC@EP2611A.P (28854.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, views, 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 with other data. 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 HK Stock Warrants for more professional insights.

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