Hong Kong stocks overbought adjustment, still looking at the support of the 20-day moving average | Gu Tianhou

On February 2, it was dry during the day, with generally clear skies. Last week, Hong Kong stocks reached a four-and-a-half-year high on Wednesday and Thursday, peaking at 28056 on Thursday, but fell significantly by 580 points on Friday, closing near the day's low at 27387. Although it rose by 638 points or 2.38% on a weekly basis, during the night session, the futures index dropped to a low of 27081, rebounding to close at 27330. ADR and this morning's black futures fell below the 27300 level, indicating that the market is likely to open lower today. Hong Kong Stocks Consolidation Completed, Still Conditions for Upside Last Friday, the Hang Seng Index fell below the 5-day moving average (27414) for the first time, and it is expected that the 5-day moving average will rise to the 27500 level today. The pullback in Hong Kong stocks is mainly due to an overbought technical trend, but the market bottom remains strong. It is believed that this adjustment will not be too large. If the market cannot recover and stabilize above the 5-day moving average today, further adjustment to the 10-day moving average around the 27000 level is expected to find support, with the 20-day moving average currently around 26863 providing stronger support. As long as the external stock markets do not undergo deep adjustments, Hong Kong stocks may first consolidate between the 26800 and 27800 levels this week, correcting the overbought technical indicators. It is still too early to determine whether this wave of upward movement has ended and reversed. Unless the Hang Seng Index clearly falls below the 20-day moving average, it is possible to complete this wave of upward movement and further seek support at the 50-day and 100-day moving averages around the 26200 to 26300 levels. Otherwise, after the consolidation of Hong Kong stocks is completed, there are still conditions to break new highs again, or the performance will be determined by this earnings season, heavyweight stock earnings, and future outlook. Rational View on Global Asset Revaluation Trend Due to the sharp drop in precious metal prices, gold mining stocks are inevitably under pressure, and we need to observe when gold prices will stop falling. Currently, the market's stance on the nomination of Jerome Powell as Federal Reserve Chairman remains unclear, but geopolitical factors are still favorable for gold price performance. This year, one should be mentally prepared for gold prices to experience significant fluctuations. It is recommended to wait and see in the short term, with gold prices expected to fluctuate around the 4800 level, facing resistance around 5000/5200, and decent support at 4600/4400. Technology stocks should continue to focus on the earnings announcements of U.S. tech companies this week. After last month's rally, the next point of concern is whether the earnings of Hong Kong tech companies will meet expectations. Recently, there has been a global trend of "Sell USA" trades, which are linked to the weakness of the U.S. dollar. In fact, U.S. President Trump intends to support the local economy with a weak dollar, and investors need to hedge against the risk of dollar depreciation, one option being to buy gold, which has led to a recent surge in gold prices. However, during the dollar's weakening, U.S. stocks and bonds have remained relatively stable, reflecting that selling dollars does not equate to selling America. Although de-dollarization is a new global trend, it cannot happen overnight, and the dollar will not collapse in the short term. It is estimated that the volatility of various assets will increase this year, and investors need to rationally view the global asset revaluation trend, manage risks well, and maintain an undefeated position. Gu Tianhou