Morning Trend | SINOPEC SSC experiences a volume-driven decline, is the rebound a false move or a pressure to new lows?
SINOPEC SSC (1033.HK) has established a MACD death cross pattern on the daily chart, with clear signs of short-term bullish strength exhaustion. Recently, there has been a significant volume sell-off, breaking below multiple short-term moving averages, indicating a weak market structure, and short-term capital speculation is cautious. The main reason for this round of decline is that the recovery of profitability in the domestic oil service industry is below expectations. Against the backdrop of high international oil prices fluctuating, the pace of new contracts in the engineering sector has slowed, increasing pressure on the gross profit of the main business. Recently, the rotation of heavyweight stocks in the sector has receded, with clear signs of capital outflow. Industry data shows that although capital expenditures by oil companies have increased, the overall performance of related companies has limited elasticity due to the decline in domestic engineering bidding efficiency and market price competition. From a technical perspective, after the death cross of the 5-day and 10-day moving averages at high levels, the stock price has continued to decline. Current short-term support is focused on HKD 5.2, and if it breaks below this level, it may test the psychological level of HKD 5. If there is insufficient trading volume during intraday rebounds, it is easy to form a false pullback, with strong resistance in the range of HKD 5.3 to HKD 5.35. In terms of capital distribution, active selling pressure continues to increase, and the intraday volume remains weak, making it difficult to see effective reversal signals. It is important to note that in the context of frequent style switching in cyclical stocks, some short-term capital is attempting to buy on dips to speculate on technical rebounds, but the medium to short-term trend remains bearish. The sector may need to wait for a new round of trend-driven increases in international oil prices to re-attract main capital. In terms of operations, strict stop-loss measures are necessary, and one should not blindly bottom-fish on the left side. If already holding shares, one can decide whether to reduce or liquidate positions based on the strength of intraday rebounds. If a significant volume reversal occurs in the future, crossing HKD 5.35 with volume, it can confirm a signal to switch from short to long
SINOPEC SSC (1033.HK) has established a MACD death cross pattern on the daily chart, with clear signs of short-term bullish strength exhaustion. Recently, there has been a significant volume sell-off, breaking through multiple short-term moving averages, indicating a weak market structure, and short-term capital speculation is cautious.
The main reason for this round of decline is that the recovery of profitability in the domestic oil service industry is below expectations. Against the backdrop of high international oil prices fluctuating, the pace of new contracts in the engineering sector has slowed, putting pressure on the gross profit of the main business. Recently, the rotation of heavyweight stocks in the sector has receded, with clear signs of capital outflow. Industry data shows that although capital expenditures by oil companies have increased, the overall performance of related companies has limited elasticity due to the decline in domestic engineering bidding efficiency and market price competition.
From a technical perspective, after the death cross of the 5-day and 10-day moving averages at high levels, the stock price has continued to decline. Current short-term support is focused on HKD 5.2, and if it breaks below, it may test the psychological level of HKD 5. If there is insufficient volume during an intraday rebound, it is easy to form a false pullback, with strong resistance in the range of HKD 5.3 to HKD 5.35. In terms of capital distribution, active selling pressure continues to increase, and the intraday volume remains weak, making it difficult to see effective reversal signals.
It is important to note that in the context of frequent style switching in cyclical stocks, some short-term funds are attempting to buy low and speculate on technical rebounds, but the medium to short-term trend remains predominantly bearish. The sector may need to wait for a new round of trend-driven increases in international oil prices to re-attract main capital.
In terms of operations, strict stop-loss measures are necessary, and one should not blindly bottom-fish on the left side. If already holding shares, one can decide whether to reduce or liquidate positions based on the strength of intraday rebounds. If there is a significant volume reversal in the future, crossing HKD 5.35 with volume, it can confirm a signal to switch from short to long. In the short term, it is recommended to maintain a light position and observe, waiting for a clear trend before participating.
Overall, SINOPEC SSC is facing a dual negative impact from sector adjustments and fundamentals, focusing on defense in the short term. Any rebound needs to confirm genuine volume and breakthroughs, and blind participation should be avoided to mitigate the risk of passive stampedes
