Tariff Pause Fuels Hot China Stock Futu. Chart Signals Key Support Levels But Will Earnings Be The Catalyst?

Futu Holdings (FUTU) has rebounded from early April lows, forming a cup base with a potential buy point at 130.88, while a handle in the base offers an earlier entry at 114.98. The stock's relative strength rating has improved, reaching 92, indicating increasing technical performance amid a broader rally in China stocks following a tariff pause.

Analysis

Futu Holdings (FUTU) has demonstrated a significant technical improvement, breaking a four-day losing streak in early April and rising from its lows on April 9. The shares have subsequently formed a cup base, a bullish chart pattern, which presents a buy point at 130.88. An earlier, potentially more aggressive entry is indicated by the handle of this base at 114.98. This positive price action for FUTU is occurring within the context of a broader rally in China stocks, reportedly fueled by a pause in tariffs. The stock's individual technical strength is further corroborated by a notable increase in its Relative Strength (RS) Rating, which jumped to 92 as of May 4, 2025, following earlier upgrades that saw it clear the 80-plus, 88, and 90-plus benchmarks. This high RS Rating signifies strong outperformance compared to the wider market, reflecting growing investor optimism for the stock.

Key Decisions for Investors

• Investors observing Futu Holdings may consider the current cup base formation, noting the potential entry point at 114.98 from the handle or waiting for a breakout above the 130.88 buy point.
• The achievement of a 92 Relative Strength Rating on May 4, 2025, signals strong upward momentum, but this should be weighed against the broader geopolitical and economic factors, such as the tariff situation, affecting Chinese equities.
• Given the rally is linked to a tariff pause, investors should monitor developments on this front closely, as changes could significantly impact market sentiment towards China stocks, including FUTU.