Mo's Daily Review: Hang Seng Index briefly reclaimed 26,000 points before falling back, market awaits Alibaba's earnings for direction!
Hello everyone! Continuing from the previous analysis, U.S. stocks staged a dramatic reversal on Friday night. After the Fed's third-in-command released dovish signals, hinting at a possible rate cut in December, the market $Hang Seng Index (800000.HK)$ indeed saw a strong rebound. Yesterday, the market not only surged over 500 points in a single day but also reclaimed the critical 100-day moving average at 25,654 points! Today, benefiting from the broad rally in the three major U.S. indices $Dow Jones Industrial Average (.DJI.US)$$Nasdaq Composite (.IXIC.US)$$S&P 500 (.SPX.US)$, which boosted sentiment for Chinese concept stocks, the market opened with a gap up at 25,948 points. After the opening, there was a short-term rally, briefly breaking through the psychological barrier of 26,000 points to reach today's high of around 26,069 points! However, resistance near 26,000 points was strong, and the market subsequently narrowed its gains. The key was that the leading blue-chip heavyweight $Alibaba-W (09988.HK)$, which led the rebound, quickly retreated after touching the HKD 160 level, indicating significant trapped positions at that level. Additionally, some funds chose to exit ahead of tonight's earnings report, so Alibaba even lost the 20-day moving average at HKD 159.6. However, it's reassuring that support at the 10-day moving average (~HKD 155.5) remains quite strong.
On the other hand, the blue-chip heavyweight $Xiaomi Group-W (01810.HK)$ rebounded from its lows after Lei Jun increased his stake by HKD 100 million, reclaiming the key support level of HKD 40. Along with the simultaneous strength in tech blue-chips like $Tencent Holdings (00700.HK)$, $Kuaishou-W (01024.HK)$, and $Baidu Group-SW (09888.HK)$, the market ultimately stabilized above 25,800 points, closing at 25,894 points. Why couldn't the market hold above 26,000 points today? The key reason was that the trading volume remained below HKD 250 billion, at only around HKD 231.1 billion. I’ve always emphasized that for the market to truly break through key resistance, trading volume must exceed 250 billion to sustain the upward momentum!
Beyond the tech stars, there were two other standout sectors worth noting today. First, the lithium battery sector, with leaders like $CATL (03750.HK)$, $Ganfeng Lithium (01772.HK)$, and $Tianqi Lithium (09696.HK)$, performed exceptionally well, becoming another key driver of market sentiment. The other standout was the online healthcare sector, benefiting from the recent surge in demand for flu and antiviral drugs. The leader $Alibaba Health (00241.HK)$ was particularly strong, surging over 4% in a single day and lifting $Ping An Good Doctor (01833.HK)$ and others. However, the sector saw diverging trends, as $JD Health (06618.HK)$ fell against the market due to its parent company $JD Group-SW (09618.HK)$ planning to issue HKD 7.8 billion in exchangeable bonds, with the underlying asset being $JD Health (06618.HK)$ shares, resulting in an independent stock performance.
Earlier, the market saw panic selling due to the Fed's hawkish signals and AI bubble concerns, with the $Hang Seng Tech Index (800700.HK)$ briefly falling below all short-term moving averages, showing clear technical weakness. But as I previously noted, such overreactions often create rare buying opportunities! With the gradual rebound in the Hang Seng Tech Index today, the recent pullback presents an excellent opportunity for long-term tech investors to position at lower levels through ETFs tracking the Hang Seng Tech Index, such as $CSOP Hang Seng Tech (03088.HK)$.
Additionally, market funds have recently been reallocating to cryptocurrencies, with $Bitcoin (BTC.CC)$ and $Ethereum (ETH.CC)$ regaining focus. I previously pointed out that Bitcoin’s trend might continue to consolidate, but for investors bullish on its long-term value and looking to buy the dip, consider the CSOP Spot Bitcoin ETF ~ $CSOP Bitcoin (03042.HK)$. The spot Bitcoin ETF is suitable for investors who want exposure to Bitcoin but prefer not to self-custody, are long-term bullish on BTC, seek compliant holdings, and wish to allocate crypto assets through traditional stock accounts. Meanwhile, $Ethereum (ETH.CC)$, like Bitcoin, has started rebounding from lows. Investors bullish on Ethereum’s potential can explore related ETFs like $CSOP Ethereum (03046.HK)$ for easy participation. Furthermore, as digital assets increasingly become a key part of global portfolios, CSOP Asset Management (Hong Kong) leads the market by launching Asia’s first Solana spot ETF~$CSOP SOL (03460.HK)$, offering investors a secure, convenient, and efficient channel to directly participate in the growth opportunities of Solana, a high-performance public blockchain.
Summary
The market showed strong upward momentum today, briefly breaking through the 26,000 psychological barrier. However, lacking follow-through momentum, it retreated upon entering the previous trapped-position zone, proving the significant resistance at 26,000 points. Therefore, whether the market can effectively break above 26,000 again depends on tonight’s earnings from $Alibaba-W (09988.HK)$ and whether they exceed market expectations, so we’ll need to monitor the next day or two for confirmation.
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