HSI, HSTECH Filled Gap, But a Healthy Mid-term Adjustment

$HSI(HSI)$ $HSTECH(HSTECH)$ dropped since Jan 30th 2023, and see 6.01% & 8.47% decline respectively as of Feb 21st( Asia Tuesday Trading).

$iShares MSCI Hong Kong ETF(EWH)$ fell 5.08%.

Among the TOP 10 stocks of $HSI(HSI)$ , $TENCENT(00700)$ fell 5.34%, $ICBC(01398)$ fell 3.82%, $CCB(00939)$ fell 1.77%, $CM BANK(03968)$ fell 10.52%, $PING AN(02318)$ fell 5.52% , $AIA(01299)$ fell 6.83%, $ABC(01288)$ fell 1.67%,  $HSBC HOLDINGS(00005)$ slightly fell 0.6%, and $BANK OF CHINA(03988)$ fell 1.34% in Feb as of Feb 21st, Asia time., only $CHINA MOBILE(00941)$ stock rises 4.8% at the same time.

In the short term, Hong Kong stocks have entered a volatile range for three reasons:

• Recently, some listed companies disclosed last year's profit forecast, and their stock prices fell sharply, resulting in a decline in risk appetite and liquidity in HK stocks.
• The strong expected part of the economic recovery was also falsified by the social finance, resident loans and CPI data in January.
• Since the forecasted PE of $HSI(HSI)$ has returned to the average value, the further rise of the index must rely on the improvement of fundamentals.

When it comes to long-term forecasts, the market still believe that this year's HK stock market may be an upward trend with twists and turns. Structurally, it mainly focuses on industries that are pro-cyclical on the profit side and sensitive to overseas liquidity on the valuation side.

From the news part, The mainland China’s regulatory policies for real estate, platform economy, education and training, etc. have been actively shifted. The recovery of the consumption scene will gradually be reflected in the income expectations of residents and be transmitted to the terminal consumption, which will help improve the medium and long-term risk premium and profit growth of HK stocks.

Technically, from the day chart trend we can see, both indexes have dropped to fill there gap left before. And from weekly chart that we may see short-term support in MA20 & MA30 area(at 19,280& 19,215 points area).

The analysis believes that this round of decline is a mid-term adjustment in the bull market of HK stocks. There is no need to worry about entering a new round of decline, and a moderate adjustment is healthier.

In this fluctuation range, it is recommended that users reduce positions, reduce transactions, and wait for opportunities to increase positions for their optimistic targets.

Investors who knows short can choose to Bear ETF$FTSE China Bear 3X Shares(YANG)$ to hedge.