Retail investors' psychology collapsed again? Liquidating tech stocks to chase semiconductors has become the biggest tragedy of the year! Is there a high chance for HK stocks to continue rising in August? Cloud / Optical Three Treasures / Big Pharma rotation strategy

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Hong Kong Stock Market Overview and Retail Investor Psychology

Host (Olga): Great. To be honest, there's been a recent phenomenon. In the first half of the year, we all felt that the Hong Kong stock market wasn't performing very well. But by July, it made a very impressive turnaround. Of course, in August, we hope the market can keep up the momentum. But do you think the chances are high?
Guest (Sam): I think the outlook is still leaning towards optimistic. Look at this one-year chart of the Hang Seng Index (HSI), right? Why is everyone's confidence so low now? It's because after March, the market performance was once not very good. During this downturn, many Hong Kong stock investors around me actually didn't make much money in July. Some of them held positions from before; in the worst-case scenario, they maintained their conviction and held on during April, May, June when Tencent (700), Alibaba (9988), and Meituan (3690) performed the worst, turning a blind eye to the hottest trading sector at the time—semiconductors—out of fear of chasing highs or fearing bubbles. They held on until May and June, couldn't resist the temptation, their faith collapsed, and they sold off Tencent (700) and Alibaba (9988) at relatively low prices to clear their positions, then turned to invest in semiconductors. For the past week or two, they tasted some success, thinking their decision was wise, and then cut the rest of their holdings to move over. This has been the biggest tragedy of the year.
Host (Olga): But really, it's not everyone's fault. Human beings' tolerance for such declines is naturally uncomfortable. So watching your ATMG (Alibaba 9988 / Tencent 700 / Meituan 3690 / Baidu 9888) while comparing it to those rapid surges. And the entire market cycle is so fast. For example, storage chips; this rally came up really quickly.
Guest (Sam): For many investors, this part of the observation is quite opaque. Since I work in this industry, I know a bit more about what's happening in different departments and the financial system, and I interact with many retail investors to get feedback. Like giving lectures in May and June, sitting there were several hundred retail friends. Everyone was full of worry about Tencent (700) and Alibaba (9988), but often emotions are inconsistent with, or even opposite to, the final results. Also, Turbo Bull/Bear certificates are data we use frequently. For instance, the "XinSou Bull/Bear" APP exclusively produced by CITIC Securities (6030). You can download it to get free, public, and timely information.

Insights from US Stocks and Global Giants on the HK Market

Host (Olga): Inside, there are half-day capital flow flash reports, and also a long/short sentiment thermometer for the whole market.
Guest (Sam): Right. Why do we say people didn't make big money in July? Because according to the long/short sentiment thermometer, the indicators have remained low. Instead, as the market rose, long position holders tended to be cautious, and even short-selling funds tried buying Bear certificates to short. This reflects that above 25,000 points, people don't really believe in it. Technically, there has been positive feedback, but retail sentiment doesn't fully believe or dare to commit. Often, bottoms emerge quietly when no one believes. When everyone believes and sells Tencent (700) and Alibaba (9988) to go All-in on semiconductors, that's when things go wrong with semiconductors.
Host (Olga): How do you view storage chips, US stocks, and the recent HSI?
Guest (Sam): Storage and US stocks can be discussed together. The current setup is theoretically most favorable for the Hang Seng Index (HSI). The Korean market (KOSPI) surged that day but struggled afterwards. The semiconductor sector, which was hyped heavily in the first half of the year, did not see a smooth V-shaped rebound. On the other hand, Microsoft (MSFT) has shown strong stock price performance recently, pulling several large bullish candles. People's faith in Microsoft (MSFT) has returned. As an indicator, Microsoft reflects that large market funds are returning to the narrative that "AI cannot burn money infinitely; results must be seen in the cloud." Large Cap and Cloud Concept Stocks
Host (Olga): Additionally, there's DeepSeek's new model.
Guest (Sam): Yes, the official announcement says DeepSeek's new model will launch in August. The AI community has high expectations, anticipating cost reduction and efficiency improvements (some rumors suggest reducing costs by 1/3 or even 1/10). If this model comes out and receives a great response, it would be a Defining Moment. Microsoft's cloud business has proven it can make money. Against this backdrop, if DeepSeek explodes in popularity, everyone can think about what might happen.
Host (Olga): What about sectors related to cloud business? Alibaba (9988) has bounced strongly these past few days.
Guest (Sam): Cloud business is very important. Among China's cloud players, when discussing market share and potential, everyone still chooses Alibaba (9988). If you are bullish on Alibaba (9988) continuing to surge, you can look at Call Warrants (27949), with over 5x leverage. If you think technically it has reached a key node and expect consolidation/bearishness for Alibaba (9988), you can look at Put Warrants (26866).
Host (Olga): Kingsoft Cloud (3896) has also risen ridiculously lately!
Guest (Sam): Yes, Kingsoft Cloud (3896) followed Microsoft (MSFT) and pulled several bullish candles strongly. Funds are speculating on the cloud concept. If you want to short-term trade Kingsoft Cloud (3896) and are bullish, you can watch Call Warrants (23735), around 4x leverage.

Optical Modules and Semiconductor "Light Three Treasures"

Host (Olga): Many friends are worried about a pullback after the rise. What is the market direction now?
Guest (Sam): I think there is a chance to go higher. If you remain bullish on the Hong Kong stock market but worry about volatility at key levels, you can adopt a strategy: First, buy Turbos (Call/Bull certificates) with a small stake. If it drops, then use a larger stake to buy underlying shares or add leverage. If it spikes up immediately after buying Turbos, take the short-term leveraged profits first, and look at the next strategy for the medium term. This is also hedging capital and psychology.
Host (Olga): Next, let's talk about "Light" concept stocks. Are there any relevant shares in the Hong Kong market?
Guest (Sam): Optical module leader Zhongji Innolight (300308.SZ / HK Stock Code 3308) performed well in the Hong Kong market today, starting to show a slight positive premium compared to the A-share market. The Hong Kong Turbo market now also has the "Light Three Treasures"! The best-selling Call warrant for Zhongji Innolight (3308) today is (15881); if you want a safer strike price near the IPO price to avoid diving, it is (15897). The other two light concept stocks are YOFC (6869) and Huizhou Desay SV Automotive (1729). Among them, Zhongji Innolight (3308) has the strongest technical pattern. Since its listing, almost everyone who bought is in profit, with no trapped selling pressure. Short-term traders would prefer Zhongji Innolight (3308) over Huizhou Desay SV Automotive (1729) or YOFC (6869). The previous semiconductor "Tao Three Treasures" were ZTE (763), Hua Hong Semiconductor (1347), and ASM Pacific (522).

Large Pharmaceutical Sector

Host (Olga): Let's quickly follow up on pharmaceutical stocks, like WuXi Biologics (2269) / WuXi AppTec (2359).
Guest (Sam): WuXi (2359) has always been the leading large pharma stock in Hong Kong this wave, and today the leader moved first. If you think it surged and closed weak, wanting to short reversely, the market-exclusive WuXi Put warrants can be looked at (15715), about 3x leverage. If you want to watch other large pharma star stocks that haven't taken off yet, like Innovent Biologics (1801), you can pay attention to subsequent accumulation. In our "XinSou Bull/Bear" APP's "XinSou Warrant" section, colleagues have specifically organized thematic classified products.

Large Financial Sector

Host (Olga): Finally, there's HSBC Holdings (5), which just released earnings at noon.
Guest (Sam): HSBC (5) released earnings at noon and announced a new round of buybacks, causing a bit of surprise in the market. HSBC (5) has been very impressive over the past six months, mostly riding along the 10-day moving average upwards. Its dividend return outperforms many large international banks in the US. If you don't want to chase the underlying stock at high prices for the long term but want to seize short-term opportunities, you can watch HSBC Call Warrants (15538), waiting for a pullback to the 10-day moving average to find opportunities.