Hong Kong stocks are rebounding—what sectors deserve attention?

港股窩輪Jenny

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Today's top 5 stocks to watch aren't about price gains or losses, but why fund flows are moving opposite to share prices

Many retail investors look at warrants and often only consider whether the underlying stock is rising or falling. However, the real opportunities—and also the easiest traps—occur precisely when the direction of the underlying stock price diverges from the fund flows of the derivative products. For example:

– The stock price falls, yet call warrant open interest surges;

– The stock price rises, yet bear warrant open interest increases rapidly;

– Already nearing resistance levels, yet bull warrant funds continue blindly chasing the price;

– The underlying stock rebounds, but put warrants, bull warrants, and bear warrants all see increased open interest simultaneously.

All five focus stocks today exhibit this kind of contradictory structure.

HSBC $HSBC HOLDINGS (00005.HK)$ : This isn't simply about bottom-fishing—it's a direct clash between strong bullish and bearish forces.

HSBC fell 2.64% today, marking its second consecutive decline and breaking below both the 5-day and 10-day moving averages. Normally, such weakness would lead to higher put and bear warrant activity. In reality, however, open interest in calls, puts, bull warrants, and bear warrants all rose—bear warrant open interest alone surged 22.90% in a single day. This isn't a market with clear directional conviction; rather, both sides believe they have an edge.

Why? Because the current price of HK$162.1 is right near the first support level at HK$162. Bulls might think: 'The price has dropped close to support, so a bounce is possible, and calls and bull warrants are now cheaper than at their highs.' Bears might think: 'It’s broken below the short-term moving averages, signaling weakening momentum; any rebound is just another chance to short again.' Neither side’s reasoning is entirely without merit. Therefore, HSBC right now isn’t a simple matter of 'betting on up or down'—instead, traders should closely watch the two key levels at HK$162 and HK$163.4 first.

Practical outlook for tomorrow

– Holding above HK$162 only indicates conditions for a rebound;

– Reclaiming HK$163.4 would initially signal short-term stabilization;

– A break below HK$162 points to the next support level at HK$160.7;

– If the rebound stalls at HK$163.4, the bearish case still offers better risk-reward potential.

Representative products

– Calls: Sun Hung Kai Financial 13710, UBS Group 29045, BNP Paribas 28838

– Puts: Sun Hung Kai Financial 15718, Citi 15514

– Bull certificates: UBS Group 54583, BNP Paribas 62147

– Bear certificates: BNP Paribas 66285, UBS Group 66621

HSBC bear certificates have heavy positions concentrated between HK$170 and HK$174.9, which remains far from the current price—so it’s too early to focus on that zone for short-term trades. It’s more practical to monitor HK$162 and HK$163.4 first.

Tencent $TENCENT (00700.HK)$ The trend is strong, but buying in too close to resistance means you could be right on direction yet wrong on timing.

Tencent rose 0.94% today, approaching the upper Bollinger Band and hitting a new high in over three months. Bull warrant open interest has risen for three consecutive days, while bear warrant open interest fell by 5.84%, clearly indicating a bullish market sentiment. This situation often tempts traders into confidently chasing the rally. However, Tencent’s current price is HK$492.2, with its first resistance at HK$497.8. More notably, the densest concentration of bear warrants lies between HK$495 and HK$499.8—almost overlapping with the HK$497.8 resistance zone. This doesn’t mean the bear warrant concentration will necessarily push the stock lower; rather, two independent data points both highlight the HK$495–500 range as the most critical short-term test zone.

How should one position more reasonably?

– A genuine breakout only occurs if the price surpasses HK$497.8 and holds above it;

– If buying bull warrants before a breakout, be prepared for a possible pullback toward HK$482.2;

– If the price repeatedly fails to break through around HK$497.8, consider short-term protective hedging using put options or bear warrants;

– The uptrend would truly cool down only if the price breaks below HK$482.2.

Representative products

– Calls: Morgan Stanley 13024, Bank of China 14767, Citi 29707

– Puts: HSBC 15915, Morgan Stanley 14707

– Bull warrants: Bank of China 53038, UBS Group 68443

– Bear Warrants: UBS Group 63400, Bank of China 56465

It’s not that Tencent can’t be bought for upside, but rather that one shouldn’t ignore the resistance at HK$497.8.

PetroChina $PETROCHINA (00857.HK)$ : Chasing calls after four consecutive declines—the biggest risk isn’t necessarily being wrong, but entering too early.

PetroChina dropped 1.61% today, marking its fourth straight decline and now testing the 30-day moving average (MA30). However, open interest in call warrants surged by 12.09% in a single day. This scenario strongly suggests retail investor behavior—after several days of price drops, calls become cheaper, leading some to believe it’s 'about time to bottom-fish.' Yet data shows: current price at HK$9.49, support at HK$9.35, first resistance at HK$9.525, second resistance at HK$9.85, with an upside probability of 41% and downside probability of 59%. Even if PetroChina rebounds tomorrow, the HK$9.525 resistance level is already very close. In other words, chasing calls now isn't betting on a major rebound—it means immediately facing a nearby resistance barrier.

A more conservative approach:

– Only consider the downtrend as stabilizing once the price reclaims HK$9.525;

– If the price pulls back to HK$9.35 and holds firm, consider a small position to bet on a rebound;

– If the price breaks below HK$9.35, don’t console yourself with 'it’s already fallen a lot.'

Representative products

– Calls: Core Pacific-Yamaichi 23488, HSBC 23656, Bank of China 23692

– Puts: Macquarie 26925, Citi 28207

– Bull Certificates: HSBC 64133, UBS Group 64589

– Bear Certificates: No suitable products available

The most valuable lesson from PetroChina right now is this: an increase in call warrant street float only indicates that someone is attempting to bottom-fish—it does not confirm that a market bottom has already formed.

SMIC $SMIC (00981.HK)$ A 4% gain doesn't mean a breakout; HK$69.05 is the key level to watch

SMIC rose 4.13% today, reclaiming the 10-day moving average (MA10) and approaching the 250-day moving average (MA250). Bull certificate street float has risen for two consecutive days, while bear certificate street float surged by 23.05% in a single day. This suggests the market is chasing the rebound on one side, while others are betting on a pullback once the price hits resistance. Product data shows: current price at HK$68, support levels at HK$65.5 and HK$62.75, resistance levels at HK$69.05 and HK$72.1. Upside risk-reward ratio is 44, downside is 56. Today’s gain is notable, but the first resistance at HK$69.05 is only about 1.5% away. Therefore, the truly relevant question for tomorrow isn’t ‘Did today’s 4% rise signal strengthening momentum?’ but rather: Can it break above HK$69.05? Only if it breaks through can we consider targeting HK$72.1; failure to break through makes a retest of HK$65.5 unsurprising.

Representative products

– Call Warrants: CLSA 15879, Citi 15868, HSBC 15917

– Put Warrants: HSBC 28738, Citi 28711

– Bull Certificates: BNP Paribas 53592, Huatai 57268

– Bear Certificates: HSBC 68669, BNP Paribas 53630

HuaHong$HUA HONG GRACE (01347.HK)$ Current price is HK$141.5, with resistance at HK$141.6—there's hardly any room for speculation

Hua Hong rose 4.74% today, marking its second consecutive gain and breaking above the 10-day moving average (MA10). However, positioning is highly fragmented: Call open interest decreased, Put open interest increased, bull warrant open interest increased, and bear warrant open interest also rose. This pattern suggests the market isn’t directionless—rather, both sides are betting on the key level of HK$141.6. Hua Hong is currently trading at HK$141.5, with immediate resistance at HK$141.6, just one tick away. Such a position is the least suitable for indecision.

Two clear scenarios for tomorrow

– Break above HK$141.6: Target HK$146.5; calls or bull warrants would then have room to extend gains.

– Fails to break HK$141.6: Consider betting on a pullback toward HK$135.6; puts or bear warrants would be more appropriate. However, if the price successfully breaks through, short positions must immediately cut losses and exit.

Representative products

– Calls: HSBC 15974, Huatai 25223, ICBC Asia 29827

– Puts: Bank of China 15118, Guotai Junan 14790

– Bull warrants: BNP Paribas 69740, HSBC 64059

– Bear warrants: UBS Group 68457, HSBC 54343

Today's 5 focus stocks—which one is most worth trading?

– Want to follow the trend: Tencent is the strongest, but wait for a breakout above HK$497.8.

– Want to bet on a rebound: HSBC needs to hold above HK$162 first; PetroChina needs to hold above HK$9.35 first.

– Want to trade a breakout: SMIC target at HK$69.05; Hua Hong target at HK$141.6.

– Want to bet on a pullback: Hua Hong has the clearest setup, but your stop-loss must be the most decisive.

Open interest isn't the definitive answer—it only tells you how the market is currently positioning itself. What truly determines whether you should enter a trade remains: the underlying stock's price level, support/resistance levels, product terms, and your exit plan if the strategy fails.

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