Morning Trend | CHINA TELECOM faces pressure with increased volume, support lost, will the main force take action?

On January 27th, China Telecom (728.HK) continued to show a sluggish trend during the trading session, experiencing a slight decline in the morning and then slowly moving downward throughout the day, with continuous capital outflows and significantly increased trading volume compared to previous periods, leading to a cautious market atmosphere. From the market perspective, the bears clearly controlled the initiative, with the closing price approaching the key technical level of 5.35 yuan, becoming a hotspot for the tug-of-war between bulls and bears during the day. In the short term, the rebound brought by last week's slight increase in institutional holdings has been completely exhausted, coupled with a lack of news and a weakening overall risk appetite for A/H shares, resulting in insufficient buying momentum in the market. The telecommunications sector has recently shown overall weak performance, lacking new industry catalysts, and the expectations for traditional buybacks and mergers and acquisitions have been fully digested by the market, with most leading stocks declining simultaneously, affecting investor sentiment. There are no significant collaborations or policy stimuli within the sector, leading funds to primarily choose to avoid risks or adjust their positions and wait. It is worth noting that heavyweight stocks, including China Unicom, have also weakened simultaneously, indicating that the entire telecommunications sector is under capital pressure, and short-term reversal signals have not yet appeared. In terms of technical analysis, the short-term MACD has entered the bearish zone, and the main moving average system has shown a death cross and is turning downward, with the downward inertia pressure gradually increasing. If the 5.35 yuan level is lost, it may trigger more programmatic selling and stop-loss orders to escape, so attention should be paid to intraday trading volume and market fluctuations. If there is a significant order from the main force to intervene and rebound, it may temporarily ease the weakness, but a reversal is difficult to be optimistic about. The strategy recommendation is to prioritize risk control in the short term, avoid the risk of sudden declines, and do not recommend recklessly increasing positions against the trend before right-side signals appear