The Hang Seng Index has wavered in the past few months as concerns about the Chinese economy and the housing market have remained. HSI was trading at H$25,800, down by 5.4% from its highest point this year. 

Hang Seng Index pressured by trouble in the real estate sector

One main reason why the Hang Seng Index has pulled back recently is that the problems in the real estate sector have resumed. 

For example, New World, a top Hang Seng constituent, is having liquidity problems even after raising $1.2 billion in debt. This raise was much less than the planned $1.9 billion raise, leaving the company with $6.8 billion in debt to manage.

Other Chinese property developers are in turmoil, two years after cracks in the sector emerged, leading to the collapse of Evergrande. Some of the companies in trouble are big names Vanke and Link Real Estate. 

Vanke, a highly indebted company, has sought a one-year payment extension on a payment note. This extra time is meant to give it breathing room before it considers restructuring. Some bondholders have signaled that they will oppose the plan. 

China economic slowdown

The Hang Seng Index has also lagged behind its peers as macro data points to a deteriorating economic environment. Data released this week showed that China’s manufacturing activity contracted in November. 

The manufacturing PMI dropped to 49.9 in November as demand remained weak despite of a truce with the USA. Another PMI report by a government agency said that the PMI remained below 50 for he eighth consecutive month.

As a result, analysts now expect the economy to record a slow growth rate in the third quarter. In a note, a Bloomberg analyst said:

“While exports may experience some recovery following the recent trade truce with the US, fluid geopolitical developments in recent weeks suggest that uncertainty will persist.”

On the positive side, the slowing economy may push the government to implement more stimulus. Beijing has already injected $141 billion in stimulus in the last few months. A Bloomberg analyst said:

“The government is more likely to start delivering meaningful support in early 2026, rather than in the remaining weeks of 2025.”

Link Real Estate stock has been the top laggard in the index in the last 30 days as it dropped by 14.65%. Li Auto, a top EV company, dropped by 14% in this period as its growth decelerated.

The other top laggards in the Hang Seng are WuXi Biologics, Lenovo, New Oriental, Xinyi Solar, JD, and Xiaomi. 

On the other hand, some of the top gainers in the Hang Seng Index in this period were companies like Hansoh Pharmaceutical, ZTO Express, Midea Group, CK Hutchison, and Haier Smart Home. 

Hang Seng Index technical analysis

The daily chart shows that the Hang Seng Index has remained under pressure in the past few months. It recently formed a double-top pattern at H$27,190 and a neckline at H$25,190, its lowest level on October 17.

The index has also formed a bearish divergence pattern. This pattern happened as the Relative Strength Index (RSI) formed a descending channel. The MACD indicator has also continued failing this month.

Therefore, the most likely Hang Seng Index forecast is bearish as long as it remains below the double-top point at $27,190. A drop below the neckline may lead to more downside, potentially to $24,000.

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PayPal stock price has been a top laggard in the past few years, with any attempts to rebound facing substantial resistance. PYPL was trading at $61.25 on Thursday, down by 35% from its highest point this year. So, is PayPal a bargain or a value trap?

PayPal’s growth has stalled, and challenges are rising

PayPal, one of the top companies in the fintech industry, is struggling as competition in the sector grows and its revenue growth decelerates. 

The company, which used to record double-digit growth rates a few years ago, is now experiencing single-digit growth metrics, a trend that will likely continue over time.

Its most recent results showed that PayPal made $8.4 billion in revenue, up by 7% from the same period last year. This revenue growth happened as the total payment volume rose by 8% to $458 billion. 

Wall Street analysts believe that the era of a double-digit growth trajectory is over. The average estimate among analysts is that its revenue will be $8.84 billion in the fourth quarter. This growth will lead to an annual rate of $33 billion, up by 4.8% from last year. 

Analysts also expect that the company’s revenue will rise by 6% in 2026 to $35.6 billion. 

One major headwind facing PayPal is that stablecoins are becoming more popular globally. These coins are normally cheaper to transact with than PayPal’s platform. 

For example, sending $10,000 overseas through PayPal can cost between $370 and $440. In contrast, a similar transaction using PayPal USD (PYUSD) would cost less than $10, depending on the network used. The same is true when using other stablecoins like USD Coin (USDC) and Tether (USDT).

PayPal valuation metrics are falling

The ongoing PayPal stock price crash has left behind a company that is highly undervalued. It has a forward price-to-earnings (P/E) ratio of 11.4, much lower than the five-year average of 25.

PayPal has a forward EV to EBITDA metric of 8.12, much higher than the five-year average of 17. Other valuation metrics show a similar situation.

The company, which is now positioned as a value stock, is working to boost its stock through financial engineering. It has returned $5.7 billion to shareholders through share repurchases in the last 12 months and plans to accelerate the process. Its share repurchases have helped it boost its earnings per share  

And in a significant step, the company announced that it would start paying a dividend, paying $0.14 per share. It will now start paying a dividend each quarter, a move that will continue to reward its shareholders.

The main challenge for PayPal is that its turnaround is taking too long to generate substantial growth metrics.

PayPal stock price technical analysis 

PYPL stock price chart | Source: TradingView

The daily timeframe chart shows that the PYPL stock price has plunged in the past few months, moving from a high of $93.43 in December last year to the current $62.

It has plunged below all moving averages, a sign that bears are in control for now. The stock has also moved below the Supertrend indicator, while the Relative Strength Index (RSI) and the MACD indicators have continued moving downwards.

Therefore, the most likely scenario is where the PayPal stock price continues falling, with the next key support level to watch being the psychological level at $50.

On the flip side, a move above the important resistance level at 64.50 will invalidate the bearish outlook and point to more upside.

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Palantir stock price has dropped into a local bear market after falling by ~20% from its highest point this year. PLTR was trading at $167, down from the year-to-date high of $207. So, will the stock rebound amid heightened valuation concerns?

Palantir growth is continuing

Palantir is a top company offering services to companies and governments. It primarily offers several products like Foundry, Gotham, Apollo, and AIP. 

Foundry provides enterprise data integration and analysis solutions to companies. Gotham is primarily tailored to government agencies, while Apollo is used in software development and management. The company’s AIP solution helps companies to integrate large language models in their workflows.

Palantir’s business is doing well, with its revenue and profits continuing their upward trajectory. Most notably, its revenue from companies has accelerated, a move that transforms it from being a mere defence contractor. 

The most recent results show that the company’s revenue rose by 63% in the third quarter to $1.18 billion. This growth was driven by the US commercial revenue, which grew by 121%. The US government revenue rose by 52%.

Palantir is attracting more companies to its ecosystem. It closed 204 deals worth about $1 million and 91 deals worth about $5 million a year. 

This growth will likely continue as companies continue to embrace its technology. Some of the top customers are companies like American Airlines, BP, HSS, Titan, and Nvidia. 

Most importantly, the company’s business is becoming highly profitable, with its net income rising to over $475 million in the last quarter. 

Valuation concerns remain

Wall Street analysts believe that Palantir’s growth will accelerate in the coming years. The average estimate is that the fourth quarter revenue will be $1.34 billion, up by 62% from the same period last year. 

If the estimate is correct, it means that the company’s annual revenue will hit $4.41 billion, a 53% increase from last year. Chances are that the company’s business will report stronger-than-expected results as it has always done. Its annual revenue is expected to hit $6.19 billion, up by 40% YoY. 

The challenge, however, is that the company’s valuation has become stretched as its market cap has soared to $400 billion. Data compiled by Seeking Alpha shows that the forward price-to-earnings ratio has soared to 290, much higher than other companies.

Similarly, the forward PEG ratio has soared to 4.73, also much higher than the sector median of 1.69. These are huge numbers, considering that a company like Nvidia has a forward PE ratio of 38. It also has a forward PEG ratio of 1.01, higher than the median estimate of 1.69. 

Palantir justifies its valuation by using the rule-of-40 multiple, which looks at a company’s revenue growth and margins. In its recent report, it noted that its rule-of-40 metric stands at 114%, which would make it a bargain. 

However, the limitation is that this multiple has its challenges, including ignoring capital efficiency and oversimplifying its performance. Still, it is hard to justify how a company making less than $10 billion in revenue is valued at over $400 billion.

Palantir stock price technical analysis

The daily timeframe chart shows that the PLTR stock price peaked at $207 in November and then pulled back to the current $167. It has now moved below the ascending trendline, which tests the lowest swings since July 2nd. 

The stock has formed a bearish divergence pattern, pointing to more downside, potentially to the support at $130, its lowest point last year. This price target is about 23% below the current level. A move above the year-to-date high of $207 will invalidate the bearish outlook.

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Lucid stock price has crashed in the past few months as challenges in the EV industry remained. LCID was trading a $12.58, down by 65% from its highest point this year. It has been in a freefall since February 2021, a move that has brought its market cap from over $120 billion to $4 billion today. So, will the Lucid share price recover?

Lucid stock price technical analysis 

The weekly timeframe chart shows that the LCID stock price has sunk in the past few months. It has tumbled from the year-to-date high of $44.20 in August to the current $12.80, and is now hovering near its lowest level on record.

Lucid stock price has moved below the important support level at $19.45, its lowest level in November last year, March, and June this year. This price was the lower side of the descending triangle pattern, a common bearish sign in technical analysis. 

It has moved below the 50-week and 100-week Exponential Moving Averages (EMA), a sign that bears remain in control. A closer look shows that it has moved to the ultimate support of the Murrey Math Lines tool. 

The Lucid share price remains below the Supertrend indicator, a sign that it is facing substantial pressure. Therefore, the stock will likely continue falling as sellers target the psychological point at $10. A move below that level will point to more downside, potentially to $8. 

On the flip side, a move above the strong, pivot, and reversal point of the Murrey Math Lines at $19.45 will invalidate the bearish outlook. 

Top reasons why the LCID stock crash has more room to go

There are a few reasons why the Lucid Group stock price has more room to go. First, the company has been highly dilutive, a move that has seen its outstanding shares rise from 167 million in July 2022 to 324 million today. 

This trend will likely accelerate because of its ongoing cash burn. Just recently, the company raised $975 million in convertible senior notes that will be due in December 2031. A convertible bond is not dilutive at first, but it may be in the future if the lender decides to exercise the shares. Indeed, the company’s statement said:

“Lucid may settle conversions in cash, stock, or a combination, giving flexibility to manage potential dilution and cash obligations.”

Second, the company continues to lose millions of dollars a year, a trend that will continue in the foreseeable future, especially after Donald Trump ended the EV credit business, which brought in millions of dollars in high-margin revenue.

The most recent results showed that the company’s net loss stood at over $1.03 billion, up from the $949 million it made in the previous year. Its nine-month loss rose to over $2.6 billion. This loss trend will continue in the coming years.

Data compiled by Yahoo Finance shows that, the company’s annual revenue will be $1.32 billion this year, up by 63% from what it made last year. It will continue growing in 2026, with its revenue coming in at $2.43 billion, up by 84% from this year. However, the company’s loss per share will be $9.21, followed by $6.59 next year.

The other main risk is that the company’s short interest is rising, a sign that investors expect the stock will continue falling in the near term. Its short interest stands at 13.54%, higher than the year-to-date low of 10%. 

READ MORE: Lucid stock price forms risky pattern pointing to a steeper crash

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Trading used to be about gut feelings and reading charts. Traders sat at desks watching screens, trying to spot patterns that meant prices would go up or down.

That world exists still but machines can now do what took humans years to learn, except in milliseconds.

Speed matters more than people admit

Algorithms process information faster than any human could. News breaks about a company and the algorithm reads it, makes trading decisions before most people see the headline even.

This speed advantage matters because markets move on information and whoever acts first usually wins, though not always.

The thing is speed alone doesn’t guarantee anything really. Plenty of fast algorithms lose money making bad decisions quickly, which seems almost worse than making bad decisions slowly if you think about it.

What actually matters is whether the machine learned useful patterns from whatever data it studied. That’s a different problem that gets talked about way less.

Investment banks and hedge funds used this stuff first because they could afford it and hire the PhDs to build it.

That advantage is shrinking. AI stock trading tools became available to regular people who don’t have millions or computer science degrees. The playing field isn’t level but it’s less tilted than before maybe.

Patterns nobody would think to look for

Humans spot patterns in data but there’s limits to how many things someone can track at once.

Maybe five or six factors if they’re really sharp. Machine learning models track hundreds of variables at the same time, find relationships that nobody would think to look for in the first place.

Oil prices, weather in Asia, social media sentiment, shipping container volumes, all getting analyzed together to predict where a stock goes.

Some patterns make sense when explained. Others don’t make logical sense but work anyway, which creates this uncomfortable thing where traders use algorithms that work but can’t explain why they work.

Regulators aren’t thrilled about this, traders aren’t either honestly. The profits are real though so everyone keeps using them.

Risk got complicated

Traditional risk management had rules like don’t put more than 5% in one stock or sell if it drops 10%.

Basic stuff that works okay. Machine learning models adjust risk based on current conditions though, volatility patterns, correlation between assets, tons of factors changing every minute.

The algorithms detect when markets behave unusually too. Flash crashes, weird volatility spikes, strange trading volumes. Machines spot these faster than humans can and pull back before losses mount.

Sometimes the machines themselves cause the problems they’re detecting though, happened a few times already and probably happens again eventually.

Machine learning models learn from historical data, they’re really good at finding patterns that existed before. Markets change though.

What worked stops working and models don’t always adapt fast enough, which creates situations where an algorithm was profitable for two years then suddenly loses money because dynamics shifted.

Conclusion

More trading shifts to machine learning systems because the advantages are too big to ignore, that much seems certain. Humans stay involved but mostly oversight roles, deciding strategy while machines execute.

The question isn’t whether this continues, it’s how fast and what breaks along the way.

Markets might get more efficient as machines eliminate obvious mispricings. Or they get more unstable as algorithms interact in ways nobody predicted.

Probably both depending on conditions, which means trading stays risky even with all this technology. The tools changed but uncertainty didn’t really go anywhere when you think about it.

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