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The stock market experienced narrow fluctuations and a slight decline in quality today. After the good stocks returned to their upward trend, both markets opened low. Due to positive news, the Shanghai and Jiangsu-Zhejiang sectors performed outstandingly, but failed to form a clear sector effect. Medical devices, media, nonferrous metals, and pharmaceuticals also showed some strength, but the large-cap heavyweights led by PetroChina, Sinopec, financials, and real estate repeatedly suppressed the small caps, once pulling the index down to around the 10-day moving average line. Supported by the 5-day moving average line, the index rebounded after opening, but due to the lack of strong competition in quality and the continued strength in the futures market, it ultimately closed lower.

Rumors of imminent property tax collection and the introduction of relatively strict land management policies have caused the real estate sector to lose its previous momentum. Although there is still some activity among speculative stocks, it is difficult to reignite significant enthusiasm. The current thematic investment opportunities still lie in policy-supported sectors that have taken turns to perform earlier. Each region has been assigned different development missions, collectively aiming to align with China's economic restructuring direction. In other words, apart from Xinjiang being assigned a higher policy level beyond the economic domain, all regions are piloting new strategic emerging industrial clusters. Of course, while debates continue over whether real estate regulation will result in a "hard landing" or a "soft landing," there is certainly a need for new economic stimulus models to spark a new round of investment fever. Regional planning combined with emerging industries gradually replacing traditional economies is the development direction for the next five years or even longer. However, people must carefully discern within industries so heavily supported by policy. Take smart grids as an example; although they have been ongoing for quite some time, many related products are still in the experimental stage and cannot yet form an industry cluster, let alone bring about economic effects. Industry estimates suggest mass application may take at least another ten years. Therefore, investors must pay attention to whether the industries their selected stocks belong to can bring genuine profit growth points to listed companies in the near future (1-2 years).

Looking ahead, the balance between bulls and bears will persist in the short term. A necessary shakeout during the rally remains essential. The support received from the 5-day moving average line indicates that the bulls have not completely abandoned control of the market. If, in the near future, they manage to fill the gap in the 2580-2600 range and receive solid support, then the upward space and time in the later stages can still be anticipated, though this should still be defined as an oversold bounce. The banking sector continues to build its top, and the small caps are also constructing a short-term top. As long as they do not continue to suppress, the index will find it hard to continue probing for tops. The current policy-driven stability is quite evident, with further steps in regional sectors and new-old industry-related industries providing not just trading opportunities but more importantly, a determination to restructure the economy. Operationally, investors should continue to maintain good positions, engage in swing trading for weaker categories within the board, and for deeply trapped varieties, if future fundamentals are poor and lack themes such as pre-restructuring, they should seize opportunities to continuously reduce positions. Pay attention to thematic investment opportunities in banks, industries, pharmaceuticals, and electronics communications.