[US Stock Options & Warrants Practical Guide] Is a tax storm coming for Hong Kong tech stocks?! Should you add or reduce positions after the Hang Seng Index failed to break through? Full analysis of the latest trends in the Nasdaq, Dow Jones, and the 'Magnificent Seven'.

Olga: Hello everyone, welcome to today's program "Practical Guide to US Stock Options and Warrants". Today we have invited Horace. Horace, welcome!
Horace: Hello everyone.
Olga: Thank you all for waiting. Today's program is just as exciting, remember to like, follow, and subscribe so you won't miss any previews. There are quite a few topics today, and the market changes every day, so we'll follow up on the topics everyone cares about most.
Recently, precious metals, Hong Kong stocks, and US stocks were all doing well, but suddenly everyone gasped in shock. What are your observations on this?
Horace: Last week we talked about Hong Kong stocks, and I said there was a high chance of a breakout, which indeed happened. After the breakout, it pulled back for two days—the first day was okay, but the second day was completely no good. It's basically confirmed to be a failed breakout—it went up, but within two days, it swallowed all the gains back.
Of course, there were many bad news in between, the fundamentals didn't cooperate, and technically, after the breakout, it pulled back. This kind of movement is very discouraging, and vigilance must be greatly increased.
Olga: If this is a healthy adjustment, where would it be reasonable to pull back to?
Horace: If it's a healthy adjustment, it should at most pull back to about half of the breakout's gains. If it completely retraces to the starting point, it would be very discouraging, and we'd have to suspect whether this is another fake breakout, failed breakout, or even the start of a reversal.
Hong Kong stocks have often been like this in the past six months: a small breakout, pullback, shake you out, stabilize, and then break out again... torturing people repeatedly, but in the end, it still hit new highs, just taking a long time. So, you need to be very flexible in handling it—you can add a little position during the breakout, but if you see something wrong, quickly reduce it back to a level you can bear. Don't go completely empty unless the major trend really changes.
Olga: If Hong Kong stocks fall again now, where is the key level?
Horace: Currently, around 26,300 coincides with the 50-day moving average, and there has been support around here for the past two days. Today is the third test. If it closes above 26,700–26,800 today, there will be three lower shadows, and the support is still there, so it's not too bad, but the picture doesn't look good. If it further falls below 26,300, the risk will obviously increase, and the significance of the previous breakout will be gone.
Recommendation: Don't be too heavily positioned now. It's better to wait for a pullback to around 25,000 before adding, rather than chasing at high levels.
Olga: Recently, tech stocks have also been very nervous due to rumors that the three major telecom operators will increase taxes. What do you think about this?
Horace: This rumor started on Monday when the three major telecom operators increased taxes. By Tuesday, small essays were flying everywhere, and the more it spread, the more reasonable it seemed. The government didn't come out to strongly clarify, only denying "something as exaggerated as 32%", but didn't deny the tax increase itself. This is scary.
Telecom is a state-owned enterprise, and when the country needs money, it's easiest to start here. Mature businesses have been supported for many years, and it's time to give back to society. If private tech companies also follow suit, the impact will be even greater.
Different companies have different resistance to declines:

Alibaba: Relatively resistant to declines because it loudly announced it would invest a lot of money in AI, and these expenses can be tax-deductible.
Tencent: Games account for a high proportion, and games aren't considered high-tech, so tax benefits may decrease. The AI part is low-key, and there may be hidden strength, but the market isn't buying it for now.
Others like Meituan and Pinduoduo: The effective tax rate is very low (15–17%). If it's raised to 25%, the impact will be relatively large.

The short-term sentiment for tech stocks is weak, so it's recommended to wait and not rush to chase.
Olga: Let's look at the Hong Kong stock index and draw it using your favorite golden ratio?
Horace: The golden ratio is especially accurate on indices.
Drawing from the recent high of 28,100:

0.236 ≈ 27,300 (a pressure level many times in the past)
0.382 ≈ 25,000 (a support level over the past three months)

If this wave of adjustment holds at 25,000 and extends upward, the 0.382 target is around 31,200, very close to the 2021 high.
But now the most critical thing is whether the 25,000–26,300 range can hold. It's recommended to be more conservative in February and not be too heavily positioned.
Olga: How to choose short-term products for the Hang Seng Index?
Horace:

For a rebound: It's recommended to use bull warrants near 25,800 (65692), with a knock-out level of 25,768 and leverage of about 25x.
For hedging/looking bearish: Bear warrants near 27,600 (67219), with a knock-out level of 27,600 and leverage of about 28x.

Olga: Back to US stocks, what's your view on the Nasdaq 100 recently?
Horace: The Nasdaq 100 previously tried to break through 26,400 but failed. When it pulled back, the volume was very high, with three big bearish candles, indicating that the high levels still need adjustment. There's a short-term chance to retest 24,100–24,200 (a C-shaped bottom).
Now it's in a rising wedge pattern, which is unfavorable for bulls. Once it breaks down, the downside risk increases. It's difficult to go long, so it's recommended to wait for a narrowing of the range and then enter after a breakout.
Olga: The Dow is relatively stronger?
Horace: Yes, the Dow has better resistance to declines, with traditional stocks, consumer staples, and healthcare supporting it. But the pattern isn't very good either, with high volatility at high levels. If it fails again at 49,800–50,000 and falls back below 48,500, the difficulty of hitting new highs will become much greater.
Olga: The US Dollar Index (DXY) has bounced back recently?
Horace: Yes, it previously broke below the long-term upward channel, and Hong Kong stocks surged to 28,000. But at the beginning of the year, when the news about Kevin Warsh (a Trump-nominated Fed chair candidate) came out, the dollar quickly bounced back. Now it's at a key watershed—100. If it goes back above 100, there will be a greater risk of adjustment in the stock market (especially Hong Kong stocks).
Olga: Quickly go through a few key US stocks?
Horace:

Tesla: Broke below the mid-term upward trend, turning into a rectangular oscillation. Short-term, it's not recommended to chase calls. It's recommended to short puts to collect time value (strike price around 400–410, weekly options) and let it grind slowly.
Nvidia: Also in a rectangular oscillation for half a year. There's support at 170–175 (200-day moving average), but without new catalysts, expectations should be lowered.
Microsoft: Valuation has returned to around 25x, starting to have value. The golden ratio 0.5 ≈ 380, 0.618 ≈ 340. These two levels are more attractive in the medium to long term.
Meta: Starts to have value at 600, but the AI contribution isn't obvious yet, and the growth ceiling is visible, so it's mainly range-bound.
Google: Earnings tonight (tomorrow morning). Valuation is over 30x, at historical highs. It's difficult to maintain after a gap-up opening. If you don't have a position, you can wait until it's near the 50-day moving average. If you have a position, consider taking some profits.

Olga: Finally, what about gold?
Horace: Gold fell sharply and rebounded sharply. It has already rebounded more than half, so it's difficult to hit new highs in the short term. It's expected to oscillate in the 4,800–5,200 range for a while. The real good buying point may have to wait for a retest of the 50-day moving average or lower medium-term moving averages.
Olga: What about CATL's H-shares?
Horace: Still under the suppression of the downward trend channel, about 5% away from a breakout. The energy storage business is worried about becoming the next "PV-style involution", limiting growth space. Short-term, it's not particularly good, so expectations shouldn't be too high.
Olga: Thank you, Horace, for today's detailed analysis! And thank you all for accompanying us. See you next week, and have a happy New Year~ Bye!
Horace: Bye, everyone take care.