AUTOSTREETS (02443) entering "exit pass" countdown, will the Hong Kong stock fund operate against the market in the short term rebound?

On November 21, AUTOSTREETS (02443) stock price hit a low of 3.38 Hong Kong dollars, signaling that it is getting closer to refreshing its new low in the recent continuous downtrend. Although it has been less than 2 years since its listing, the stock price trend of AUTOSTREETS has been like a roller coaster. It was observed that since its listing in May last year, AUTOSTREETS has been in a state of breaking the issue for a long period of time. Even after officially "joining the market" on September 10, the company's stock price remained depressed, dropping to a low of 3.8 Hong Kong dollars, a decrease of more than 60% from the offer price of 10.2 Hong Kong dollars. Until October 8, the company suddenly surged, with its stock price skyrocketing by 344% in early trading, pushing it up to 117 Hong Kong dollars, and closing with an increase of nearly 100%. However, on November 27, more than a month later, AUTOSTREETS faced its first major unlock since listing. The company's stock price plummeted by more than 40% within the first half hour of trading on the same day, closing at 6.8 Hong Kong dollars, down 44.44% for the day. Since then, AUTOSTREETS' stock price has remained at a low level, only hitting a new low of 3.22 Hong Kong dollars on April 7 this year due to dramatic fluctuations in the Hong Kong market. On April 8, AUTOSTREETS' stock price soared by 13.99%, with the lowest price of the day being 3.38 Hong Kong dollars. Although AUTOSTREETS' stock price has fluctuated slightly since then, it has mainly fluctuated between 3-5 Hong Kong dollars. Now, with its phased low price once again reaching 3.38 Hong Kong dollars, against the background of the stock being about to exit the market, it is clear that investors in the market are facing a decision on allocation. Entering the countdown to being kicked out of the market? Since reaching a high of 5.11 Hong Kong dollars on July 18, AUTOSTREETS' stock price has entered a new round of downward volatility. Especially since October, after over 2 months of long-term sideways shaking, AUTOSTREETS' stock price has officially entered a downward divergence pattern in terms of moving averages, with all moving averages diverging downward. Usually, such technical patterns indicate a fundamental reversal of a stock's previous technical trend, as holding costs decrease over time, establishing a downward trend. This may be related to AUTOSTREETS being on the verge of being kicked out of the Hong Kong stock market. Data shows that the next regular adjustment date for the Hang Seng Index and the Hong Kong stock market is in March next year, with the announcement of the review results on February 25, and the review period from January 1, 2025 to December 31, 2025. AUTOSTREETS' average market value during this review period is 33.44 billion Hong Kong dollars, significantly below the current threshold of 61.01 billion Hong Kong dollars by 27.57 billion Hong Kong dollars. Considering that it is currently the end of November and there is only about 1 month left until the end of the latest round of inspection period for the Hong Kong stock market connection, there is a great likelihood that AUTOSTREETS will be removed from the list in the new round of Hong Kong stock market connection adjustments. Referring to the market performance after the regular Hong Kong stock market adjustment on March 10 this year, data shows that on that day, the average price of stocks included in the Hong Kong stock market connection increased by 0.72%, with trading volume increasing by around 8 times. Stocks removed from the Hong Kong stock market connection list on that day saw an average price decrease of 14.24%, with an average trading volume increase of 19%. Twenty stocks experienced a drop of over 10%. Based on past data, stocks removed from the Hong Kong stock market connection list may face both a drop in price and liquidity, which could be an important factor in driving the continued exit of funds in the market and the subsequent drop in stock prices. Contrary market buying by Hong Kong stock market funds for a technical rebound? From the distribution of chips, after more than 2 months of sideways shaking and nearly 18 consecutive days of continuous decline, AUTOSTREETS' stock price has entered the oversold zone while locking in a large number of trapped chips above. Currently, the profit chip ratio of AUTOSTREETS is only 0.16%, and a chip peak has formed around an average of 4.22 Hong Kong dollars. Currently, with the moving averages converging downward, any rebound in the stock price will encounter strong resistance at these moving averages. This creates strong pressure on the company's stock price, making it difficult for main funds to raise the price in the face of the trapped chip peak. However, under this background, some funds from the Hong Kong stock market connection are choosing to buy against the market. According to observations, on November 21, the top five selling positions for AUTOSTREETS were held by Goldman Sachs, UBS, Barclays Asia, JP Morgan, and Dahua Jixian, selling 367,200 shares, 89,800 shares, 59,600 shares, 56,200 shares, and 50,000 shares respectively. On the buying side, China Investment (Shanghai-Hong Kong Stock Connect) was the largest buyer, purchasing 1,265,800 shares; China Chuangying (Shenzhen-Hong Kong Stock Connect) was the second largest buyer, purchasing 287,000 shares, indicating that most off-market holders were mainland retail investors from the Hong Kong stock market connection. Based on the shareholding ratio, China Investment (Shanghai-Hong Kong Stock Connect) and China Chuangying (Shenzhen-Hong Kong Stock Connect) currently hold 8.58% and 5.92% of AUTOSTREETS' shares respectively. In fact, any short-term market trend must go through a process of turnover from low to high, high to low, with the movement of chips being the process of profit realization. At this point, if funds from the Hong Kong stock market connection choose to "buy against the market," it may be the possibility for a short-term technical rebound in AUTOSTREETS' stock price. Although AUTOSTREETS' stock price has remained relatively stable in sideways shaking since the beginning of the year, with fluctuations in different ranges, the market trend has basically operated based on BOLL technical analysis. Taking the 2-month period from May 13 to July 18 as an example, on May 13, after AUTOSTREETS' stock price hit the BOLL top line for the third time, it dropped sharply that day, indicating the start of a new downtrend, with the stock price quickly falling below the BOLL bottom line in 7 trading days. The stock price then fluctuated repeatedly between the middle and lower BOLL lines. By June 23, AUTOSTREETS' stock price once again hit the BOLL bottom line and showed signs of an upward trend, with a candlestick bullish engulfing pattern above the BOLL bottom line the next day, formally establishing a technical uptrend. On June 30, after the technical uptrend, the stock price stood above the BOLL top line, rising on high trading volume, leading to a confirmed uptrend in the BOLL line. Referring to the above trend, it is clear that AUTOSTREETS is currently in a downtrend running along the BOLL bottom line. Considering the trading volume, on October 6 when the downtrend started, the daily trading volume of AUTOSTREETS visibly decreased rapidly, with only 5 trading days in the past 2 months having over 5 million shares traded, much lower than before, indicating a significant reduction in the frequency of internal and external chip exchanges and a heavier sentiment of wait-and-see on the market. However, as mentioned earlier, with the profit chip ratio now only 0.16%, if the company's stock price continues to fall, the sentiment of holding chips within the market may rise, leading to a further drop in trading volume. This could trigger a divergence in choices among off-market holders, with an anticipation of a short-term technical rebound, which may be the reason why funds from the Hong Kong stock market connection are choosing to enter the market against the current trend. However, it is worth noting that according to the rules, once a company is removed from the Hong Kong stock market connection, mainland investors cannot make new purchases, but can only sell the company's stock. In other words, when a company is removed from the Hong Kong stock market connection, mainland investors not only cannot contribute liquidity, but may also become a source of selling pressure. Based on the current shareholding proportion in the Hong Kong stock market connection for AUTOSTREETS, once the company is removed from the Hong Kong stock market connection list, the 14% shareholding pressure may have a significant impact on the stock price.