Hexun Investment Advisor Zhang Hao: Has the Rebound from Bottom Exploration Begun to Reverse?

On Monday after the close, Hong Kong stocks continued to rise, while A-shares stabilized and began to rebound after midday. Will Tuesday see the continuation of this stabilization and a start of a counterattack?

On Monday, the opening was low in the pre-market, and the indices kept falling in the morning, but started to stabilize and rebound in the afternoon. On Tuesday, the focus remains optimistic on the chemical sector; Wednesday shows divergence; Thursday looks at recovery. Recently, many individual stocks have experienced continuous declines. From both technical indicators and market sentiment, there is a strong demand for a rebound. This short-term correction is nearing its end, and the market is expected to see a recovery this week. Additionally, external declines caused by geopolitical conflicts have raised economic concerns globally, but A-shares have performed strongly due to policy support. Panic funds have been absorbed over the past two days, and external influences are diminishing, so it’s no longer reliable to judge A-shares based on external markets; internal and external logic are completely different. The true upward trend always progresses amid divergence and rotation. The recent active pullback is to clear out floating shares and consolidate positions, making room for a healthier rally next.

Although Monday saw a decline, trading volume did not increase, indicating that the bearish forces are exhausted. Few are willing to cut losses at this level, and selling pressure isn’t enough to trigger panic selling. According to the February social financing data released by the village, the incremental social financing was 9.6 trillion yuan, an increase of over 300 billion compared to last year. Non-bank financial institutions’ deposits increased by 2.8 trillion yuan, indicating that residents’ savings are flowing into the market. Veteran investors know that after an emotional bottom, a turning point often occurs. We are now at a critical turning window, with a high probability of an upward shift. Once the main upward movement begins, the market will enter a phase of accelerated short squeeze, leaving no room for bears.

Back to sectors. The electronic computing sector is in its final countdown; if it doesn’t rebound strongly in the next two days, it will be problematic. Even if it recovers, it will be a partial recovery; a full sector rebound is unlikely. Relying on just one stock isn’t enough; sentiment can’t be lifted solely by that. Unless the previous few stocks can come back significantly, the electronic computing sector can be temporarily ignored. The unexpected strength in cross-border and deep-sea stocks on Monday was due to news sentiment. Friends holding these stocks should consider taking profits at high points and avoid holding through volatility. Semiconductor chips are a transitional sentiment sector; while they don’t significantly stimulate the market, this indicates that technology remains the main direction of the bull market, and we continue to adhere to this view.

Finally, a reminder: the market style is switching frequently and rotating quickly. The most vulnerable to elimination are those with a “leader” mindset, so be cautious.

(Editor: Zhang Yan)

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