Technical signal is here! The short-term buying window for Hong Kong stocks has opened!
However, the potential profit margin for short-term long positions is limited this time. The support level of the Hang Seng Index is around 18500-18550 points, and the resistance level is around 19300-19500 points. It is recommended to prioritize Hong Kong stocks with characteristic targets and weighted stocks that have not fully recovered from the previous decline, such as internet giants and new car-making forces.
Recently, the Hong Kong stock market has continued to decline against the backdrop of the US dollar's return due to factors such as the strong performance of the US economic fundamentals, the uncertain increase in the US debt ceiling, and the increased probability of the Fed raising interest rates.
According to Wang Xueheng and Zhang Xi, analysts at Guosen Securities, the market environment turned around last week. On the one hand, US House Speaker McCarthy announced that he had reached some basic consensus with US President Biden on the US debt ceiling. On the other hand, the market judged that the probability of the Fed raising interest rates in June had dropped significantly. These two factors combined drove the US dollar index and US bond yields to peak and fall back, triggering a valuation recovery in the Hong Kong stock market.
From a technical signal perspective, the potential profit space for this short-term long window is limited. Measured by the Hang Seng Index, the support level (stop loss line) is approximately around 18500-18550 points, and the pressure level is around 19300-19500 points.
From a quantitative indicator perspective, according to Guosen Securities' ERP model, the probability of buying at the Hong Kong stock market's stage low point on June 1 is around 86% (it is expected that 86% is a mild/moderate long signal level, and reaching 95% is a strong long signal); as of the latest closing, the probability has dropped to 53%.
Assuming that emotional recovery is combined with a slight decrease in US bond yields, the model's output for the Hang Seng Index's recovery space is approximately around 19500-20000 points.
In terms of target selection, due to the lack of fundamental catalysts for this Hong Kong stock rebound, it is recommended to prioritize characteristic targets and heavyweight stocks that have not fully recovered from the previous decline, such as Internet giants, new car-making forces, consumer electronics leaders, sports apparel, beer/non-alcoholic beverage leaders, catering/social service leaders, etc.