[Technical rebound] How many current key points can Hong Kong stocks keep in mind

$Hang Seng Index(800000.HK)$ Since yesterday's low of 18,671 points, it has rebounded. As of the moment of writing, today's Hang Seng Index had risen by more than 400 points to a high of 19,314 points. The market once again hopes that the mainland will introduce policies to support the economy before the Spring Festival holiday. The idea of maintaining good liquidity before the holidays is the main hope to support a recovery in market conditions. In fact, there are variables in the implementation of the policy, but the current market consensus is that Hong Kong stocks are a “policy market.”

What I want to say today is that under the “policy market” hype mentality, trends often turn around and make judgments based on technical analysis. This is because they generally look at the bottom and then hope that the policy will be introduced. It is only when news of the policy comes to light that it can be confirmed that the market conditions have improved. For example, after the Hang Seng Index fell by 14,794 points on January 22, 2024, the 14-day RSI was severely oversold and initially fell below the 25.5 level. Then, only after “state-owned enterprise reform” and other related measures were introduced, the market conditions could actually be confirmed to rebound. Simply put, market conditions often start with a technical rebound, then evolve into the beginning of an improvement in the market.

The main reasons supporting the technical rebound in Hong Kong stocks

Distribution map of Ushikuma Stock Exchange

On the Futubull app, you can clearly see the distribution of Cow and Bear Stock Exchange, Hang Seng Index -> Revolving Securities -> Cow and Bear Street Stock Distribution. Yesterday, the Hang Seng Index plummeted to 18,671 points. It has basically brought the bullish position to the point where the entire army is being overrun. This also led to funds being viewed as a small incentive to further decline in the short term.

Judging from the latest bulls and bears distribution, although the share of bullish securities is still high, the ratio of bulls and bears is 53.47%: 46.53%, which can be said to be a close level in recent months, plus bullish certificates that have not been priced in the short term. On the other hand, although there is no clear heavy warehouse area, there are quite a few stocks distributed between 19100 and 19699. This is also the reason for the emergence of weak warehouses today.

Reminder: The above analysis of the distribution of Bull and Bear securities should be very thorough. If investors should pay attention to changes in relevant positions, remember that they will also update the latest positions from the previous trading day every morning, and do not abuse them.

Hang Seng Index Technical Analysis

From the perspective of technical analysis, the 14-day RSI of the Hang Seng Index fell to 32, the lowest position in almost a year. Coupled with the K-line of the Hang Seng Index appearing in a “hammer head” pattern yesterday, KDJ is also steadily issuing buy signals today. The possibility of supporting a recovery in market conditions in the short term is increasing, and the value rate leading to a rebound in capital markets has become attractive.

Although today's market conditions have not broken through the upward trend, in the short term, you can first look at the 10-day line or a short-term downward trajectory, at about 19,400 points. If you can break through, you can expect to repair the decline that unfolded from the high level of 21070 points on December 10, 2024 until yesterday, January 13, when the rebound was about 0.382, that is, test the 1,600 point level first.

If you look at it again using the above short time chart, it is also in line with the above view of the short-term rebound.

Technical analysis and judgment in the short term

• First support level: 19090 points (the top of the first Dayang Candle in a small hour chart)

• Important support level: 18,744 points (bottom of the big shadow candle through the bottom)

• First resistance level: 19400 points (10-day line)

• Next resistance level: 19600 points

In terms of index deployment, the most important thing for investors now is to measure individual risk tolerance. It would be good to use betting codes to control the blog's rebound.

There is no change in the opinion of trading stocks or not trading on the market:

Although there are signs of a recovery in market conditions, I believe that the “stock trading is not market trading” opinion on Hong Kong stocks has not changed much. I also expressed the same opinion at TVB Finance Desk this morning.

The technical rebound can be watched out for four stocks

The reasons for selecting the above four stocks were taken into consideration for the following reasons

• There will definitely be policy support on the consumption side

• There has been no negative news about our individual stocks in the past two months

• Strong or stable cash flow, winning the market in 2024

• KDJ issued purchase signals earlier than major markets

Next, let's do a brief analysis of each ship

Meituan

$MEITUAN-W(03690.HK)$ I have always been optimistic about stocks, but in the past two months, market conditions have been quiet, and the real estate and consumer markets have become the hardest hit areas for the stock market. Weak stock prices are inevitable. However, as market conditions are expected to improve, stock prices are also expected to break through a short-term downward trajectory. After all, the company's fundamentals are strong, and losses in the Group's new business in the past have also continued to narrow. Strong fundamentals themselves are the primary factors to consider in the blog's backlash.

• Support level: 138 yuan

• Resistance level: 147 yuan

• Key resistance level: 158 yuan

Hecheng Group

$TRIP.COM-S(09961.HK)$ Last year, it was the second largest increase among the Hang Seng Index constituent stocks. A year-on-year increase of 95%. The TTM price-earnings ratio is also only 18.4 times. Profitable outbound travel has little impact on the consumer market. Coupled with the company's stable profitability, I believe this advantage will not change much in the short term.

• Support level: 496 yuan

• Resistance level: 512 yuan

• Key resistance level: 542 yuan

Nongfu Spring

$NONGFU SPRING(09633.HK)$ As a leader in mass necessities, there are quite a few major banks that have maintained a positive view on necessities stocks this year, believing that leading brands have benefited from the downgrade in consumption, and the impact last year was not anticipated. The company's price-earnings ratio is still below 30 times. Driven by the brand's advantage, I think I can start watching.

• Support level: 33.5 yuan

• Resistance level: 35.5 yuan

• Key resistance level: 39.2 yuan

Undersea turtles

$HAIDILAO(06862.HK)$ It is a non-essential consumer stock. The author has also been optimistic about stocks in the fourth quarter of last year. The company's same-store sales and turnover rate have also begun to slowly improve, and cash flow and profit models have also begun to stabilize, and valuations below 20 times PE are still attractive.

• Support level: 13.8 yuan

• Resistance level: 14.6 yuan

• Key resistance level: 16.0 yuan

Xiaomi Group

Of course, the stocks that can be purchased will not be just the above four, but today I have selected them under the circumstances where TVB has limited time. Stocks with strong fundamentals can still be considered, such as the biggest increase last year $XIAOMI-W(01810.HK)$ . Recently, it has been affected by news of the Ministry of Defense's black list of relations between China and the US, but in reality, there have been no real negative factors for the time being, and it is expected to recover in the near future with market conditions.

Although KDJ did not issue a purchase signal, it has not lost its mid-term upward trajectory, and even the moving average still maintains a favorable “multi-head arrangement” pattern. This type of stock is relatively suitable for medium- to long-term deployments.

• Support level: 32.5 yuan

• Resistance level: 34.5 yuan

• Key resistance level: 36.85 yuan

• Author Information

  Tan Zhi Le, Chief Analyst of Futu Securities

  (The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the Proposed Share Issuer)