Geely Auto has broken below the short-term moving averages and received a systematic 'Buy' rating. Short-term focus is on the defensive battle at 20.4 yuan.

On the previous day (18th), it closed at 20.580 yuan, with the short-term trend showing clear weakness. The stock price has fallen below the 10-day moving average of 22.084 yuan and the 20-day moving average of 22.666 yuan, gradually approaching the lower Bollinger Band at 20.591 yuan. The closing price of 20.580 yuan on the previous day was very close to the lower band level, reflecting ongoing market selling pressure. Although the Relative Strength Index (RSI) has dropped to around 22, entering an oversold region, there are still no obvious signs of a bottoming out. Therefore, at this stage, one cannot simply assume that the stock has hit a short-term bottom just because it has fallen significantly.

Geely Auto closed at 20.58 yuan on the 18th, with a technical signal indicating 'Buy' (oversold rebound). Compared to its peers, $BYD COMPANY (01211.HK)$ Closing at HKD 93.80, RSI around 35, technical signal is 'Buy' (deeply oversold). $LI AUTO-W (02015.HK)$ Closing at HKD 64.90, RSI around 39, technical signal is 'Buy' (sharp decline rebound). $XPENG-W (09868.HK)$ Closing at HKD 60.65, RSI around 38, technical signal is 'Buy' (weak volatility). This indicates that the auto sector as a whole is in the 'oversold recovery after deep correction' phase, except for... $NIO-SW (09866.HK)$ Other than a sell signal given due to weak technicals, most major automakers are showing buy signals, but this is more driven by expectations of a rebound after a sharp fall rather than confirmation of a trend reversal.

From the sentiment in comments, the most obvious market divergence for Geely Auto is the contradiction between 'fundamentals seemingly not bad' and 'persistently weak stock price movement.' The bullish side believes that Geely still has support from its ICE vehicles, EVs, sales, and brand positioning, and compared to some loss-making or highly valued auto stocks, Geely's share price should not be under long-term pressure. Some investors believe the stock has fallen close to the previous high or near HKD 20, creating potential for a rebound play, with some even considering HKD 20 as the bottom and planning to accumulate around this level.

This kind of bullish sentiment reflects that the market hasn't completely given up on Geely, but rather there is capital waiting for opportunities to rebound at lower levels. Especially since the current price is close to the HKD 20.440 support level, coupled with the Relative Strength Index (RSI) being in an oversold zone, there is indeed potential for a short-term technical rebound. However, the question remains whether the rebound will have sufficient trading volume support and whether it can break back above the key resistance near HKD 22. If the rebound only slightly rises from near HKD 20 but fails to reclaim HKD 22, the overall move would still just be a pullback within a weak trend, insufficient to confirm a reversal.

Bearish comments focus on several risk points.

First, there are concerns that funds are continuously selling off, with some investors directly referring to it as 'retail dumping,' reflecting lingering worries about overhead supply pressure.

Second, many comments suggest that Geely has entered a one-way downtrend, with some projecting a drop below HKD 20.58 to target HKD 18.836, while others think it could return to single digits or even look towards HKD 15.

Third, some investors are focusing on the 200-day moving average, believing they will consider entering only if it breaks below this important medium- to long-term level.

These bearish sentiments may not all be confirmed by existing technical data, but they reflect that retail investors currently lack confidence in Geely's trend. In particular, the breach of the 10-day and 20-day moving averages, with the 30-day moving average still above at approximately HKD 23.185, shows that the medium- and short-term trends have yet to recover. Even though the stock price is nearing the lower Bollinger Band, the market has yet to show any clear signs of stabilization. This is precisely why the bearish side still has reasons to wait for even lower levels.

Observational comments best reflect the true sentiment of retail investors. Some are asking, 'Is today’s drop necessary?' while others describe new energy vehicles as leading the decline. There are also those pointing out that Li Auto's sharp fall has weighed on auto stocks' sentiment, reflecting how the market links Geely Auto’s decline with the overall mood of the automotive sector. Some believe Geely's stock is volatile—when the broader market plunges, it may not fall the hardest, but when the market surges, it might not rise either. This perception weakens short-term buying interest, making funds more inclined to wait for clear support rather than rushing to buy during a downturn.

There are currently three main common questions.

First, whether it is possible to accumulate at around 20 yuan.

Second, whether the support level of 20.440 yuan can hold.

Third, if it breaks below 20 yuan, whether to wait for a lower price before considering buying.

From a technical analysis perspective, 20.440 yuan is the first short-term support. If this holds firm and is combined with an oversold condition, Geely Auto might have a chance to rebound. However, if 20.440 yuan fails, the stock price could further test 19.325 yuan. At that time, the expectation of '20 yuan being the bottom' will weaken, and market sentiment may also deteriorate further.

On the resistance side, HK$21.600 is the first rebound resistance, while HK$22.238 presents stronger resistance. The area near HK$22 is currently the most crucial turning point. Only by breaking through and stabilizing above HK$22 can Geely Auto's short-term trend shift from weak consolidation to recovery. If the price keeps fluctuating between HK$20.440 and HK$21.600, it remains in a low-level range without confirming a successful rebound. For short-term traders, the ideal scenario would be to first defend HK$20.440, then gradually reclaim HK$21.600, and finally challenge the key resistance near HK$22 again.

In terms of trading volume, recent declines have not seen a significant surge in volume, though overall activity remains robust, indicating persistent selling pressure. During rebounds, trading volume hasn’t increased noticeably, showing insufficient upward momentum, and short-term capital remains cautious. This explains why, despite some investors believing Geely Auto’s fundamentals aren’t bad, its share price still hasn’t recovered quickly. It’s not that there’s no buying interest, but rather that buying power isn’t yet strong enough to counteract selling pressure.

Therefore, Geely Auto’s current risk-reward ratio is moderately low. In the short term, conditions for a rebound aren’t entirely absent, as the stock price is approaching the lower Bollinger Band, and the relative strength index has entered oversold territory. However, the stock has broken below several short-term moving averages, and overhead resistance remains heavy, with no clear signs of stabilization yet. At this stage, the priority isn’t guessing whether the bottom has been reached but observing if HK$20.440 can hold. If it does, a technical rebound is possible; if not, the downtrend could extend toward HK$19.325. The condition for a genuine turnaround is clear: breaking through and stabilizing above the pivotal level near HK$22.

Reply to some investors' views:

@No can no bbWhen it drops close to the previous high, there is indeed a thought of betting on a rebound, but first, we need to see if 20.440 yuan holds steady; otherwise, it could still test 19.325 yuan.

@我要有錢途In order to break even in the short term, it needs to at least reclaim 21.600 yuan first and then break through the watershed near 22 yuan; otherwise, it would still be considered a weak rebound.

@231573770The area around 20 yuan is a market focus, but the technical supports are at 20.440 yuan and 19.325 yuan. If 20.440 yuan fails, one should be prepared for a further drop.

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

Deployment Focus: Geely Auto's closing price yesterday was 20.580 yuan. In the short term, we need to first observe whether the support at 20.440 yuan can hold. If it holds, there could be a chance for an oversold rebound; if 20.440 yuan fails, the risk of testing 19.325 yuan increases. Only by breaking through and stabilizing above 22 yuan can the trend potentially turn strong again.

Strategy One | Hold 20.440 yuan for an oversold rebound

$UBGEELY@EC2609A.C (24988.HK)$ | Strike price 19.51 yuan | Actual leverage 4.8x | Strike price below current price, relatively close to the in-the-money call warrant, suitable for short-term rebound plays if the stock price holds above 20.440 yuan; focus on capturing the initial reaction of a rebound from near the lower Bollinger Band

$BIGEELY@EC2609A.C (25051.HK)$ | Strike price 19.51 yuan | Actual leverage 5.0x | Also an in-the-money call warrant with slightly higher leverage, suited for aggressive positions; ideal usage is when the stock price does not break below the support level and shows intraday stabilization for a rebound play

$MSGEELY@EC2609A.C (24927.HK)$ | Strike price 19.49 yuan | Actual leverage 5.3x | Slightly lower strike price compared to similar products, higher leverage, suitable for those optimistic about a rebound from oversold conditions but requiring more flexible short-term positioning

Strategy Two | Break above 22 yuan to chase recovery

$CIGEELY@EC2612A.C (27337.HK)$ | Strike price 22.88 yuan | Actual leverage 4.4x | Strike price close to the 22 yuan threshold, suitable for chasing recovery after breakout confirmation; product characteristics align with the strategy of 'following after breaking through resistance'

$MSGEELY@EC2611A.C (27935.HK)$ | Strike price 23.99 yuan | Actual leverage 5.3x | Higher strike price, stronger flexibility, suitable for use when the stock price clearly breaks above 22 yuan with trading volume support; not recommended for early deployment before a confirmed breakout

$UBGEELY@EC2612A.C (26929.HK)$ | Strike price 18.18 yuan | Actual leverage 3.4x | Strike price below the current price, milder leverage, suitable for reducing risk of chasing highs after a breakout while participating in the continuation of the rebound in a more stable manner

Strategy Three | Turn bearish after breaking below 20.440 yuan

$UBGEELY@EP2610B.P (28169.HK)$ | Strike price 18.47 yuan | Actual leverage 4.3x | Put warrant strike price near the lower support zone, suitable for deploying downside tests toward 19.325 yuan after breaking below 20.440 yuan; attack and defense positions are closer under short-term weak scenarios

$MSGEELY@EP2610B.P (28219.HK)$ | Strike price 18.47 yuan | Actual leverage 4.3x | Same strike price of 18.47 yuan, suitable as a bearish tool after breaking below support; focuses on capturing continued downward momentum rather than preemptively estimating a bottom

$UBGEELY@EP2610A.P (27780.HK)$ ｜Strike price 16.99 yuan｜Actual leverage 4.8x｜Lower strike price with higher leverage, suitable for more aggressive bearish strategies; use case is when the stock price falls below 20.440 yuan without signs of stopping and further approaches the 19.325 yuan support

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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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