[Hong Kong Stock Analysis] Hang Seng Index opens 152 points higher but the gains narrow; China Everbright Securities: The sideways pattern has not been broken; Tencent and Alibaba's earnings are expected to boost market sentiment, but may not lead to a clear market direction

Tencent (00700) announced that the new local AI personal assistant QClaw has entered internal testing. The stock price surged 7% yesterday, then rose another 4% in early trading, driving the Hang Seng Index higher and opening above 26,000 points. Contemporary Amperex Technology (03750) has risen for two consecutive days after its earnings, surpassing 600 yuan. Guotai Securities indicated that the Hang Seng Index may rise to 26,300 in the short term, but expects it to remain range-bound in April and May, with no clear breakout.

Guotai International Securities strategist Wu Lixian analyzed in our video program “ET Market Opening Live” that, in the short term, technically, the “Head and Shoulders” neckline is at 26,300, which is believed to be a significant resistance level. For the second quarter, he expects continued range-bound trading. “In the coming period, Hong Kong stocks will still fluctuate between 25,000 and 27,000, with no strong or clear signals of upward or downward breakout. Therefore, investors might consider deploying strategies within this range. Some stocks have risen significantly and can be taken profit.”

Tencent and Alibaba to Announce Earnings Next Wednesday and Thursday

Tencent and Alibaba (09988) will release their earnings next week. Wu Lixian believes that the results will be positive for market sentiment but may not lead to a clear direction for the Hang Seng Index. “Currently, the earnings data will provide a somewhat positive support to the current market. Over the past month, whether the overall market or key stocks about to announce earnings, their prices have already declined in advance… Releasing earnings at these levels will support the stock prices well.”

He continued, “However, this positive effect is unlikely to quickly push the Hang Seng Index above 27,000 points. After falling from 28,000, investors still have lingering fears, plus the ongoing Middle East tensions cast a shadow, and investor sentiment may not be overly aggressive.”