View of The Day: 20641 中壽麥銀零零八沽 (認沽證)

2628 China Life has been performing well in the past couple of weeks, closing at $38 before Easter holiday (see the second graph below). I am not a big fan of technicals but it looks it is bound to correct at some point with RSI reaching 70. At the time there're no clear selling signals yet. All I am waiting for is the STC %K (the blue line of the second sub-graph of the large graph of 2628) crossing below %D (the red line).

On 26 Mar, the STC blue line goes above the red line. Loosely speaking it was a buy signal. Currently %K line reaches 100 but the %D line (red) is trying hard to catch up. At some point I believe 2628 will come down - but at the moment the stock is going for $40. If it cannot break through and STC shows a short signal with RSI lingering on above 70. We should buy 20641 a put warrant by Macquarie (see small graph below). Leverage at 9.5x, it is quite an exciting bet. As 2628 has been rising in the past 2 weeks, 20641 came down closing at $0.058 (down 23.7%). It is not expensive and the turnover can support my theory on a short-term trading. Once 2628 turns around we should be able to catch the correction with this put.

Source: ET Net; 20641 China Life Put/Macquarie


Source: ET Net Hong Kong; 2628 China Life