Zhipu AI plunged sharply from 1,030 yuan and entered a high-level consolidation phase; retail investors are looking to buy the dip, but the 975-yuan level must hold.
Zhipu closed at RMB 1,015 yesterday (the 19th), plunging 9.41%. Short-term market sentiment has quickly shifted from earlier bullish momentum to volatility, hesitation, and panic. Today (the 20th), it fell another 1.65%, closing at RMB 1,013.
Based on investor comments, bullish sentiment hasn’t been entirely abandoned. Some view today’s sharp drop as a mere shakeout and even consider the RMB 1,000 level an attractive entry point for buying the dip. On the other hand, many investors are now concerned about a potential top forming at these elevated levels, sector-wide corrections, or institutional players pumping up the price before offloading shares, with some even setting downside targets at RMB 950 or RMB 700. This shift in sentiment indicates that Zhipu is no longer in a straightforward, strong uptrend but has entered a phase of high volatility at elevated levels.
The most significant development today is the stock’s rapid decline from its recent high of RMB 1,229.00 down to RMB 1,015. Although the current price remains above the 10-day moving average (MA) of RMB 1,001.25, the 20-day MA of RMB 959.350, and the 30-day MA of RMB 940.717, selling pressure at these elevated levels has clearly intensified. For short-term traders, this move shouldn't be simplistically viewed as a routine pullback—it’s nearly a 10% drop accompanied by significantly higher volume compared to recent low-volume trading sessions, indicating a volume-supported decline. A sharp price drop with rising volume typically signals profit-taking or short-term capital exiting the position. Even if a rebound occurs afterward, it will be crucial to monitor whether buying interest can absorb the renewed selling pressure.
Among bullish comments, the most representative view treats today’s decline as a shakeout. Some investors stated they would buy near RMB 1,000 and hold firmly, while others believe that a break below RMB 1,000 would present an excellent buying opportunity. Some even anticipate a strong rally tomorrow, a collective afternoon rebound, or a swift recovery back upward. This suggests that a segment of the market still believes the Zhipu investment theme isn’t over yet—particularly given the ongoing narrative around large AI models—and that investors are willing to wait for a bounce after a sharp selloff. However, this bullish sentiment currently leans more toward speculative rebound plays rather than confirmation of renewed strength, as the price has already retreated from the upper Bollinger Band, and short-term price swings have notably widened.
Technically, Zhipu’s current price of RMB 1,015 remains above the 10-day MA of RMB 1,001.25, which is a key short-term positive factor. As long as the support zone between RMB 1,001.25 and RMB 975.000 holds, the stock may maintain a high-level consolidation pattern rather than immediately entering a clear downtrend. However, confidence has already been shaken following today’s plunge from RMB 1,229.00. If any rebound fails to retake RMB 1,118.000, investors are likely to treat each rally as an opportunity to exit or reduce positions. Therefore, the real short-term confirmation needed isn’t just whether the RMB 1,000 level can hold, but whether the price can reclaim RMB 1,118.000.
Regarding Bollinger Bands, the middle band sits at RMB 959.350, the upper band at RMB 1,149.47, and the lower band at RMB 769.230. The current price remains above the middle band, suggesting the overall trend hasn’t completely weakened yet, but it has fallen below the upper band, indicating that the prior strong rally has cooled off. This is a delicate position: technically, the uptrend isn’t broken as long as the price stays above the middle band, yet the sharp retreat from recent highs implies diminishing risk-reward for chasing entries at current levels. If the stock can hold the RMB 975–RMB 1,001 range and then break back above RMB 1,118, it could signal a recovery attempt following high-level consolidation. Conversely, if RMB 975 is breached, the next lines of defense will be the 20-day MA at RMB 959.350 and the 30-day MA at RMB 940.717. A break below this cluster of moving averages would shift the pattern from high-level consolidation to a clear weakening trend.
Bearish comments mainly focus on three aspects. First, the idea that support has turned into resistance. Some investors directly pointed out this shift, reflecting that short-term capital is already doubting whether buying interest above RMB 1,000 is reliable. Second, the view that the entire AI large-model sector is undergoing a correction, and Zhipu is merely being dragged down by the broader sector—thus, it’s unwise to rush in and catch a falling knife. Third, concerns that the stock hasn’t fallen enough yet; some mentioned waiting for RMB 950, others for RMB 700, with some even asserting that the bottom certainly hasn’t been reached yet. Although some of these bearish comments are emotional, they reflect how market sentiment has shifted from chasing gains to adopting a defensive stance following today’s sharp drop.
Comments expressing hesitation or posing questions better reflect the real pressure retail investors currently face. Some asked if it’s time to buy the dip, others questioned whether anyone was still holding, whether someone had exited their full position, or if they should add to their position. There were also inquiries about why the stock corrected so deeply today. Underlying these questions is the most common psychological shift after a high-volatility stock plunges sharply: holders worry about turning paper gains into losses, those who haven’t entered fear missing a potential rebound, and those looking to buy low are uncertain whether to enter at RMB 1,000, RMB 978, RMB 950, or even lower. In such situations, the key isn’t guessing the absolute bottom but managing positions in stages based on technical levels.
The immediate short-term observation zone is between RMB 1,001.25 and RMB 975.000. Whether the stock can hold this range will determine if Zhipu remains in a high-level consolidation pattern. If the price stabilizes near this zone and rebounds with renewed volume support, the recent drop to around RMB 1,030 may simply represent post-plunge consolidation. Should the price break above RMB 1,118.000, market confidence would visibly recover, potentially setting up another test of the resistance zone between RMB 1,149.47 and RMB 1,229.00. Conversely, if it breaks below RMB 975.000, the next support levels to watch would be the midline at RMB 959.350 and the 30-day moving average at RMB 940.717—making the ‘wait until RMB 950’ stance of观望 (wait-and-see) capital more relevant.
The Relative Strength Index (RSI) stands at approximately 52.271, with momentum retreating to a neutral-to-slightly-bullish level—not yet showing extreme oversold conditions. This is crucial: despite today’s large drop, technical indicators do not suggest the stock has reached an extremely oversold state. In other words, a bounce is possible, but one shouldn’t assume a bottom has formed solely based on a single-day plunge. For short-term traders, the risk-reward ratio of chasing entries has deteriorated, as wider volatility increases stop-loss distances—poor entry timing could easily lead to being shaken out intraday.
Overall, Zhipu’s short-term risk-reward ratio is neutral to slightly unfavorable. The share price remains above major moving averages, and the uptrend hasn’t been fully broken yet. However, after the sharp decline from RMB 1,229, the risk of having chased in at high levels has clearly increased. A bounce around RMB 1,000 isn’t impossible, but RMB 975 must be treated as a critical risk threshold; if RMB 975 is breached, it’s no longer appropriate to treat the stock as a strong performer and try to catch it on the way down. Conversely, if the price holds steady between RMB 975 and RMB 1,001 and then breaks back above RMB 1,118, it could signal recovery after a high-level consolidation, with a potential rebound target revisiting the range of RMB 1,149.47 to RMB 1,229.00.
The most rational strategy at this stage is as follows: existing holders should monitor the RMB 1,001.25–975.000 support zone—avoid panic selling after the sharp drop, but also don’t interpret every rebound as a return to strength. Those not yet in the market should avoid rushing in; a more prudent approach is to wait for confirmation that the support zone holds before staging entries, or wait for a confirmed breakout above RMB 1,118.000. If the price breaks below RMB 975.000, attention should shift to whether RMB 959.350 and RMB 940.717 can provide support. Zhipu still has conditions for a rebound, but today’s high-volume plunge has altered the short-term rhythm—from a strong uptrend to high-level consolidation—requiring a shift in trading tactics from offensive to defensive.
Replying individually to investor comments
@EarnSomeDogFoodMoney@赚点狗粮钱: Just guessing blindly—the washout today might be setting up for a rally ahead of Google’s event. Bought at an average price of 1,000 today and holding tight.
The RMB 1,000 level is near the 10-day moving average. If the price holds above the RMB 975–1,001 range, there’s still a chance for a rebound—but if it breaks below RMB 975, reassessment will be necessary.
Zhipu has entered a high-volatility phase. It’s unwise to take large short-term positions chasing moves up or down. The RMB 975 risk threshold must be strictly respected.
After today's sharp drop, volatility has increased significantly, reducing the short-term risk-reward ratio. Watch whether the price can hold steady at HK$975 first.
You may observe, but avoid rushing into a heavy position. If HK$975 holds, consider a small bet on a rebound; if it breaks below, proceed with caution.
Short-term support lies between HK$1,001 and HK$975—holding above this range is necessary for another upward move.
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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