The Lion-OCBC Securities Hang Seng Tech Index ETF (HSTECH) has managed to close above $1 on two consecutive days. Prices did a 4% correction from Feb 27 to Mar 4. Prices then recovered, making a new two year high of $1.008.
A consolidation at this level is normal and prices are likely to move mildly lower, dipping marginally below $1.
HSTECH was listed at $1.33 in 2021. In the four-year weekly chart, prices have broken out of an almost two-year base formation at 86 cents, indicating an eventual upside of $1.22.
The top six stocks by weightage in the Hang Seng Tech Index are Xiaomi, JD.com, Alibaba, Tencent, SMIC and Meituan. Chinese tech stocks have been on a tear since news that DeepSeek had been able to achieve more than US peers with less power and less advanced chips.
Car crash?
See also: Who really controls City Developments? US risk-free rates tumble as sentiment sours
Elsewhere, Tesla has had something of a car crash. It has fallen from US$488.24 to US$263.45 almost 46% since December 2024.
It appears that prices have fallen to a support area which may — whether people like it or not — cause the decline to stop. Whether prices can rebound or just stage a dead cat bounce remains to be seen.
Since short-term indicators are at the low end of their range, prices can rebound. However, the chart pattern is inherently weak, a downtrend is underway and any rebound is likely to be temporary.
See also: This stock is a direct beneficiary of the Singapore stock market’s revival
Support is at US$260. A break below this level would see prices moving to $160. The chart pattern could be an early sign of fundamental weakening.
