May 20 [HK Stock Podcast] Part-1 – Hang Seng Index, Hua Hong Semiconductor, Kingboard Laminates

1. After breaking below short-term moving averages, the Hang Seng Index held above 25,500; bulls took profits early, and bearish sentiment has started betting on a further decline toward 24,200.

The Hang Seng Index closed at 25,651.12, down 146.73 points or 0.57%. The intraday high was 25,713.53 and the low was 25,555.06. Although it remained above the 25,500 level at close, the overall trend has shifted from the prior rebound recovery to a weak consolidation phase. The current price is below the 5-day moving average (25,709.62), 10-day MA (26,163.91), 20-day MA (26,069.88), and 30-day MA (26,060.68), indicating that the index has fallen back below key short-term moving averages. Near-term resistance is concentrated between 26,060 and 26,164.

Regarding Bollinger Bands, the middle band is at 26,069.88, the upper band at 26,631.64, and the lower band at 25,508.13. The current price of 25,651.12 is near the lower band but has not yet decisively broken below 25,508, signaling that the index has entered a weaker zone and is now testing support at the lower band. If support holds around 25,508 and 25,500, the index may consolidate sideways at lower levels for now. However, if this zone is breached, downside room will reopen, and market concerns over a potential drop toward the 24,200 area will intensify.

In terms of the Relative Strength Index (RSI), the short-term reading is approximately 31.252, with other readings around 42.207 and 46.927, indicating that short-term momentum has clearly weakened and is approaching oversold territory. This condition reflects not a strong pullback but rather a loss of upward follow-through after a rebound. Regarding trading volume, the latest turnover is approximately HK$262.098 billion, which remains relatively high. Combined with the index’s decline, this suggests selling pressure has not fully dissipated. If bulls fail to quickly reclaim the 26,000 level, market sentiment will continue shifting toward a defensive stance.

Regarding investor comments, bullish investors who are optimistic have chosen to take profits on their callable bull contracts (CBBCs), with a call price at 25,395 points. This move represents a relatively prudent risk management approach at current levels, as the index closed at 25,651 points—fairly close to the 25,395-point call price. Additionally, the lower Bollinger Band is around 25,508 points; if the index breaks below 25,500 points, the risk for CBBCs would rise sharply. Given that the index has already fallen below multiple short-term moving averages, locking in profits now is more appropriate than stubbornly waiting for a rebound under the currently weak market conditions.

Bearish investors view this as the final opportunity to enter bearish positions, anticipating a sharp decline tomorrow and targeting 24,200 points in the near term. This outlook is technically grounded in the fact that the index has already broken below the 5-day, 10-day, 20-day, and 30-day moving averages and is approaching the lower Bollinger Band, indicating clear short-term weakness. However, 24,200 points is near a previous support level; directly testing this zone would first require a confirmed break below both 25,500 points and the lower Bollinger Band at 25,508 points, along with sustained downward momentum. If the index merely hovers near the lower band and consolidates, bearish warrant positions should remain cautious of potential rebounds from oversold levels.

In terms of short-term strategy, the Hang Seng Index’s key pivot zone currently lies between 26,000 and 26,164 points. Until the index reclaims this range, it remains in a weak consolidation phase, giving bearish traders temporary initiative. Immediate support lies at 25,508 points and 25,500 points; a break below these levels could lead to a further test of prior lows. Conversely, only a sustained move above the opening level of 25,798 points and then above 26,000 points would signal initial technical recovery. For CBBC holders, the call price at 25,395 points is uncomfortably close to the current index level, creating high defensive pressure. For bearish warrant positioning, the advantage lies in the clear overhead resistance from moving averages, but risk control still hinges on the index staying below 26,000 points. $BI#HSI RC2809L.C (55298.HK)$$BI#HSI RC2809L.C (55298.HK)$$HS-HSI @EC2609A.C (27959.HK)$$UB-HSI @EC2609B.C (27924.HK)$

2. After a sharp rally, Hua Hong Semiconductor has returned to the 135 HKD resistance/support zone; shorting from highs should first watch whether 132 HKD can be breached.

Hua Hong Semiconductor closed at HK$132.800, up HK$16.200 (+13.89%). The stock surged significantly today, reaching an intraday high of HK$134.900 and a low of HK$114.900, closing near the upper end of the day’s range—reflecting renewed short-term buying strength. At current levels, the share price is clearly above the 5-day MA (HK$127.823), 10-day MA (HK$127.360), 20-day MA (HK$119.773), and 30-day MA (HK$110.365), signaling a restored bullish short-term moving average structure and a return to a strong technical zone.

Regarding the Bollinger Bands, the middle band is at HK$119.773, the upper band at HK$143.465, and the lower band at HK$96.080. The current price of HK$132.800 is notably above the middle band but has not yet touched the upper band at HK$143.465, indicating that although the stock has rallied sharply in the short term, it has not yet reached an extreme overbought level within the Bollinger Band framework. However, the stock previously peaked at HK$144.700, while today’s high was only HK$134.900—still short of retesting the prior high. Thus, the 135 HKD area naturally serves as a key short-term resistance level.

On the Relative Strength Index (RSI), short-term readings are approximately 65.578, with other sets at around 62.961 and 61.176, reflecting a clear rebound in momentum but not yet entering extreme overbought territory. This suggests the stock has indeed strengthened in the short term, but whether the uptrend can continue depends on a breakout above 135 HKD and further advances toward the 143–144.7 HKD high range. In terms of volume, today’s turnover was approximately HK$585.1 million, with significantly higher trading volume accompanying the sharp price rise—indicating that today’s rally was supported by real capital inflows, not just a low-volume bounce.

Investors believe the upside is capped at 135 HKD and suggest initiating short positions via put warrants with a strike price of 80 HKD. The core rationale is viewing 135 HKD as a short-term resistance level for the rebound. Since today’s high reached HK$134.900—nearly touching 135 HKD—this level indeed serves as an immediate battleground. If the stock fails to break above 135 HKD tomorrow and subsequently falls below the 132 HKD area, a short-term pullback becomes likely, providing a more solid technical basis for put warrant deployment.

However, it should be noted that the current share price remains well above multiple key moving averages, and the Bollinger Band middle band sits at HK$119.773, leaving considerable distance between the price and the middle band. In other words, even if the stock is rejected at 135 HKD, it does not immediately signal a weakening trend. If the price merely consolidates near the highs while holding the 127.8–132 HKD range, bearish positions may not gain an advantage quickly. The 80 HKD-strike put warrants represent a deep out-of-the-money position, requiring highly precise directional timing; if the stock merely trades sideways rather than plunging sharply, the product’s performance may be suboptimal.

In short-term strategy, Hua Hong Semiconductor’s key pivot point is around 135 HKD. If the stock breaks above 135 HKD and stabilizes, it could next challenge the Bollinger Band upper band at 143.465 HKD and the prior high of 144.700 HKD—increasing the risk for short positions at elevated levels. Conversely, only if the stock shows clear rejection at 135 HKD and then breaks below both 132 HKD and the 5-day MA at 127.823 HKD can we consider the rebound momentum to be waning, thereby improving the risk-reward profile for put warrant deployment.

Overall, Hua Hong Semiconductor today experienced a sharp rise on high volume, approaching a resistance level. In the short term, it would be inappropriate to assume a top has formed simply due to the large gain. The HK$135 level is the first key point—whether it breaks through will determine the next directional move. For bearish positioning, confirmation could come from rejection at HK$135 or a breakdown below HK$132. If the stock price remains elevated or even breaches HK$135, short positions must strictly manage risk. $HSHUAHO@EC2608B.C (24753.HK)$$BIHUAHO@EC2608B.C (24790.HK)$$SG#HUAHORC2611D.C (53386.HK)$$UB#HUAHORC2610D.C (69490.HK)$

3. Kingboard Laminates closed above HK$45, maintaining short-term strength, but a breakout above HK$48.22 is needed to initiate a new upward wave.

Kingboard Laminates closed at HK$45.600, up HK$2.440 or 5.65%. Today’s high reached HK$46.160, with a low of HK$42.580. The closing price re-established support above HK$45, keeping the short-term trend strong. From a moving average perspective, the current price sits above the 5-day MA (HK$45.085), 10-day MA (HK$43.868), 20-day MA (HK$39.507), and 30-day MA (HK$34.873), indicating the stock remains above key short-term moving averages, with no clear disruption to its uptrend.

Regarding Bollinger Bands, the middle band is at HK$39.507, the upper band at HK$49.021, and the lower band at HK$29.993. The current price of HK$45.600 is above the middle band and approaching the upper band zone, suggesting the stock remains in a relatively strong range. However, the previous high stands at HK$48.220, leaving some distance before reaching that peak. Whether the uptrend can continue over the next one to two days hinges first on holding above HK$45, then challenging today’s high of HK$46.160, which would pave the way for another test of the prior high at HK$48.220.

In terms of the Relative Strength Index (RSI), short-term readings are around 68.259, with other sets at approximately 70.183 and 70.843, indicating momentum remains strong but is nearing overbought territory. This environment favors investors holding call warrants, as the stock maintains an upward trend; however, it also implies entry points are not low. If the price approaches HK$48 without breaking through, short-term profit-taking may occur. On the volume front, the latest turnover stands at roughly 32.8752 million shares, significantly more active than earlier periods. Combined with the stock holding at elevated levels, this suggests underlying buying interest has not yet weakened substantially.

Investors believe closing above HK$45 today is already favorable, and hope the stock will push higher over the next two days to break the prior high, while holding call warrants with a strike price of HK$40.01. This view has solid technical grounding: the stock closed above HK$45 and also above the 5-day MA of HK$45.085, confirming continued short-term strength. The HK$40.01 strike price aligns well with the current situation—where the spot price of HK$45.600 exceeds the strike and the moving averages are trending upward.

However, true confirmation of renewed strength requires not just holding above HK$45, but breaking above today’s high of HK$46.160 and subsequently challenging the prior high of HK$48.220. Only if the stock breaches HK$48.220 can the short-term uptrend be considered genuinely reactivated, opening the door to test the Bollinger Band upper band near HK$49.021. Conversely, if the stock fails to sustain gains tomorrow and falls below HK$45—particularly if it breaks the 5-day MA at HK$45.085—the short-term dynamic would shift from strong momentum to consolidation at elevated levels, and holders of call warrants should watch for potential pullback risk.

From a short-term tactical standpoint, HK$45 serves as the immediate support/resistance level, with the next support at the 10-day MA of HK$43.868. As long as the price holds above HK$45 and breaks through HK$46.160, call warrant holders can still anticipate a test of the prior high at HK$48.220. If the price falls below HK$45, today’s strong close loses its advantage, necessitating a more defensive stance in the short term. Overall, Kingboard Laminates remains a strong performer, but it is now approaching both the prior high and the upper Bollinger Band zone. Its risk-reward profile hinges on whether it can swiftly break through HK$48.220—not merely sustain levels above HK$45. $SG-KBLH@EC2612A.C (28762.HK)$$JP-KBLH@EC2611A.C (28923.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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