February 6th [HK Stocks Podcast] Hang Seng Index, Xiaomi Group, NetEase, China Construction Bank, Li Auto, China Shenhua

February 4th [Hong Kong Stock Podcast] Hang Seng Index, Tencent, Xiaomi Group, Li Auto, China Resources Beer, Li Ning

February 3rd [BOC Guest]: Hang Seng Index, China Mobile, Zijin Mining, Zijin Gold International, Pop Mart, Xiaomi Group

1. Hang Seng Index: Bullish investors believe that if the index closes near 26,600 points, there is a chance to hit the bear certificate's forced call price by next Monday. Some are attempting to hold bull certificates overnight with a forced call level set at 26,000 points. On the other hand, some investors think 26,600 points are close to the short-term top, and given the large number of outstanding bull certificates in the range between 26,200-26,300 points, they choose to hold bear certificates overnight with a forced call price set at 27,100 points.

Simon: Hello everyone, today (February 6th) we will continue analyzing the Hong Kong stock market. First, let’s look at the Hang Seng Index, which showed a downward trend today, falling approximately 1.2% to close at 26,559 points. Trading volume was slightly lower than yesterday. The Hang Seng Index has been continuously correcting recently, dropping as low as near 26,200 points during today’s session, which may impact market sentiment. It’s normal for divergence in bullish and bearish views to occur, partly due to inherent market volatility and partly because investors focus on different time horizons—some emphasize short-term trading while others adopt a medium- to long-term perspective. We do not predict market movements; our technical analysis and data are provided for reference only, aiming to help you make decisions based on your investment style.

Some investors believe there is support for the Hang Seng Index around 26,500 points, leading them to hold bull certificates overnight. Such operations are neither right nor wrong, as the key lies in personal market judgment. However, special attention should be paid to the setting of forced call levels when choosing products. Another group of investors believes that 26,600 points could form a short-term resistance, thus shifting toward bear certificates. Coexistence of bulls and bears in the market is quite normal.

From a technical signal perspective, the current short-term direction is 'neutral', with an equal number of buy and sell signals. Short-term support is at 26,064 points; if broken, it may further drop to 25,400 points. Therefore, when considering bull certificate allocation, it is recommended to choose products with forced call prices close to or below 25,400 points to increase risk buffer space. For example, products with a forced call price around 25,400 points have leverage ranging from 22 to 24 times; when the forced call price is slightly above 25,400 points, the leverage can reach up to 26 times. Note that the farther the forced call price is, the lower the leverage usually is, but the risk of being called also decreases accordingly.

If the support level is at 26,064 points, choosing a bull certificate with a forced call price of 26,000 points may seem to leave some room, but if the market unexpectedly breaks this level, the product will be called. Hence, it is recommended to widen the distance of the forced call price appropriately, sacrificing some leverage in exchange for higher safety. The biggest risk when investing in bull or bear certificates is hitting the forced call price, which leads to principal loss.

Therefore, it is important to emphasize again that the key to investment is not about choosing the direction of the market, but rather risk control when selecting products. For bear certificates, the current resistance level is near 27,200 points; if broken, it may rise further to 27,600 points. Hence, when configuring bear certificates, it is recommended to choose products with a recovery price close to 27,600 points. Although the current index is only at 26,500 points, if the market experiences a one-sided upward movement, the closer recovery price might still pose risks. Choosing products based on resistance levels may reduce leverage but will help manage risks and increase investment confidence. $BI-HSI @EP2605B.P (23127.HK)$$UB-HSI @EP2605A.P (23089.HK)$$BI#HSI RP28039.P (62755.HK)$$BI#HSI RP2803F.P (53379.HK)$

2. Xiaomi Group-W (01810.HK): The stock price stabilized at HK$35. Does it have the momentum to continue rising next week? In the warrant market, some investors bought put warrants at today’s high.

Simon: Let’s first analyze Xiaomi Group-W (01810). Today’s closing price was around HK$35.18, which recorded an increase, but trading volume decreased compared to the previous session. Some investors asked whether Xiaomi still has upward momentum in the short term. Based on technical signals, there are slightly more buy signals than sell signals, making the overall bias 'buy.' Regarding resistance levels, if it can break through HK$36.8, it may rise further to HK$38.1.

However, some investors hold a bearish view and have chosen to buy Xiaomi put warrants. There are currently some at-the-money put warrants with a strike price of approximately HK$35.16, offering leverage of over 6x, with some reaching up to 6.9x. It is worth noting that these products mostly expire in April this year, which means their shorter duration results in higher leverage. If you want to reduce time value decay, consider products expiring in June, with strike prices ranging between HK$31 and HK$32, out-of-the-money by about 8.5% to 9.4%, and providing leverage of over 5x, with some reaching 5.6x. Carefully review the terms when selecting products. $UB#XIAMIRC2606G.C (56157.HK)$$BIXIAMI@EC2612A.C (13186.HK)$$HSXIAMI@EC2612C.C (22791.HK)$$BI#XIAMIRC2612E.C (60479.HK)$

3. NetEase-S (09999.HK): Investors are asking whether the stock needs to retreat to the 100-week moving average to find support. Some investors said they would build positions again at HK$170.

Simon: NetEase-S (09999) has shown weak performance recently, falling 2.23% today to close at HK$188.3, with an intraday low of HK$185.1, which is near the lower Bollinger Band on the daily chart. NetEase's share price has been correcting since its January high of HK$232. Investors are paying attention to downside targets and whether it is a good time to buy for a rebound.

Technical signals indicate a slight 'buy' bias, though not strongly. A technical rebound may occur when the stock approaches the lower Bollinger Band. If investors wish to wait for a lower entry point, this is also reasonable. The current support level is at HK$180.4; if broken, it could drop to HK$165.9. Therefore, if you believe the HK$180 support is unstable, you can wait until the price approaches HK$165.9, then decide whether to enter based on overall market sentiment and changes in trading volume.

4. China Construction Bank (00939.HK): Can it stabilize above HK$8.2-8.3 next week? Some investors are interested in bull contracts with a recovery price of HK$7.

Simon: China Construction Bank (00939) has shown strong performance recently, with three consecutive days of gains. Today’s stock price rose further, with trading volume slightly increasing from the past three days, closing at HK$7.97. Some investors are asking whether it can reach HK$8.2-8.3 next week. Many investors are also paying attention to CCB bull contracts.

To determine whether the target price can be reached, we first need to observe whether it can break through the resistance level of HK$8.17. If successful, it may rise to HK$8.37, potentially exceeding HK$8.3. When considering bull contracts, avoid products with a recovery price near HK$7.57 and opt for those with a recovery price around HK$7. Though leverage for products near HK$7 may be less than 10x, making them relatively less attractive, they are safer from a risk perspective. The current support level for CCB is at HK$7.57, so setting the recovery price at HK$7 provides some buffer. Bull contracts with recovery prices near HK$7.5 offer leverage of up to 13x, though higher leverage comes with increased risk. Choosing products with a farther recovery price sacrifices some leverage but enhances holding stability.

5. Li Auto-W (02015.HK): Should short-term investors exit? How to observe resistance levels? Some investors are increasing their positions in call warrants, with a strike price of 75.93 yuan.

Simon: Li Auto-W (02015) has shown strong recent performance, with continuous gains over several trading days. Today’s trading volume significantly increased, surpassing previous levels and even the high point from mid-December. The stock closed at 71.7 yuan, breaking through the upper Bollinger Band on the daily chart. Some investors are asking whether they should take profits in the short term and where subsequent resistance levels lie.

For investors who have held positions since earlier, it may be advisable to partially take profits, such as selling one-third to half of their holdings to secure gains. Remaining positions can be retained to ease psychological pressure. Regarding resistance levels, short-term resistance is at 75.2 yuan, which also corresponds to the middle line of the Bollinger Bands on the weekly chart. Technical signal summaries indicate that short-term 'sell' signals slightly dominate, for reference.

Some investors continue to focus on Li Auto call warrants. If considering a purchase, it's recommended to avoid products with excessively high strike prices. Currently, there are September-expiring call warrants with strike prices around 75 yuan, offering leverage of approximately 3.1 to 3.3 times, with some slightly higher. Note that these products exhibit relatively low implied volatility, and premium levels vary. When selecting, carefully compare terms to choose products with better cost-performance ratios.

6. China Shenhua (01088.HK): Investors inquire if now is a good time to enter the market, hoping the stock will reach 50 yuan.

Simon: Lastly, focusing on China Shenhua (01088). The stock price fell slightly today, but experienced significant intraday fluctuations, oscillating between the middle and upper lines of the Bollinger Bands, ranging from about 39.9 yuan to 43.3 yuan.

Stocks with large fluctuations are more difficult to trade. It would be ideal to buy at the middle line of the Bollinger Bands and sell at the upper line, but this is hard to execute precisely in practice. Some investors, optimistic about the stock, ask if it could rise to 50 yuan.

In terms of resistance levels, short-term resistance lies at 43.7 yuan; if broken, it might test 45.3 yuan. Therefore, the likelihood of reaching 50 yuan in the short term is low and may require more time. The technical summary currently shows a 'neutral' signal, providing no clear directional guidance. If expecting the stock to reach 50 yuan, patience is advised.

$BICSHEN@EC2605A.C (23694.HK)$$MBCSHEN@EC2606A.C (18262.HK)$

That concludes today’s analysis. If you have any other questions related to Hong Kong stocks, feel free to leave comments for discussion. Wishing everyone a pleasant weekend, see you again next week.

Reminder: This article does not constitute any investment advice.

The content of this article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis presented herein may change at any time without prior notice. We assume no responsibility for any loss or damage caused by reliance on the information provided in this article. Technical analysis reflects only certain technical conditions and should be used in conjunction with other data to comprehensively evaluate asset performance. Trading decisions should not be made solely based on the content of this article. Past performance is not indicative of future results.

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