Stock index volatility leads to upward breakout, requiring observation ----- Analysis and prediction for Friday, November 23rd: (It is predicted that the Shanghai Composite Index will see increased volatility on Monday. The upward resistance points are at 3280 and 3333, while the strong support point is at 3241 and weaker resistance at 3352. Notably, stocks like Weiwei Co., Ltd. and Weiyangshen Co., Ltd. hit their upper limits. The 3333 point has become a benchmark for institutional operations. The closing price of the Shanghai Composite Index was 3308, quickly dropping to 3320 before stabilizing around 3310 and then rising again. Two attempts to break through 3333 failed, with the index dipping to 3309 just before noon. In the afternoon, it rebounded to 3324 but fell again as foreign oil companies and PetroChina's stock prices dropped, showing no significant pressure on the index. It briefly touched 3305 before stabilizing between 3316 and 3310. At 2:57 PM, it once again approached the sensitive level of 3333, leading to an increase in trading volume as institutions pushed the index up. Ultimately, it closed at 3338, the highest point of the day, rising by 30.32 points or 0.92%, with a trading volume of 2054 billion yuan. The K-line showed a large bullish candlestick breaking through upwards, setting a new high for this round. However, it lacks the momentum and energy to continue moving upwards, only achieving a new high through volatility. Whether the index can continue its upward momentum tomorrow still requires observation after the opening bell, but the medium to long-term upward trend remains firm.
Predictions suggest that the Shanghai Composite Index may experience a pullback after an initial upward move tomorrow, possibly followed by another upward push after a consolidation. Key signal points include 3352 for upward movement, resistance at 3374 and stronger resistance at around 3400 (a quick rise to this level often indicates excessive profit-taking). Support levels are at 3310 and stronger support at 3280.
Among the listed companies, 1382 stocks rose, 77 remained unchanged, and 294 fell, indicating a market controlled by bulls. 26 stocks hit their upper limits. The food manufacturing sector surged by 4.11%, with Jinjing liquor, Weiwei Co., Ltd., and Lianhua flavoring hitting their upper limits. Other sectors such as agriculture, transportation equipment, and non-ferrous metals also performed well.
The significant fluctuations today were largely driven by heavyweight stocks like Sinopec and PetroChina. These two stocks have shaken off heavy chips through recent volatility, potentially contributing positively to the index's upward movement. Agricultural Bank of China, after a three-day adjustment, also shows signs of rebounding. Meanwhile, real estate, financials, energy coal, and steel sectors remain in strong consolidation phases. Some financial stocks weakened, including China Life Insurance, Shaanxi Trust Investment, Bank of China, CITIC Securities, and China Minsheng Trust. Keep an eye on Haitong Securities' dual-listed shares for potential significant gains. The real estate sector, after prolonged consolidation, shows signs of rotation-based gains, particularly in Wanke A, Fenghua Shares, Zhejiang Guangsha, and other stocks. Steel stocks led by Baotou Iron & Steel show signs of strengthening, with Tangsteel, Shaoguan Iron & Steel, Hangzhou Iron & Steel, Ansteel, and others potentially offering short-term opportunities today.
In summary, the market remains strong despite some declines in individual stocks. Washout declines are less likely than bottoming out declines, so there’s no need to panic. Stocks discovered on Friday, such as Weiwei Co., Ltd. and Weiyangshen Co., Ltd., performed well. While not all discovered stocks perform excellently, they warrant further observation during intraday trading. This analysis is for educational and research purposes only, not as operational advice. Readers should select their own operational stocks amidst the lively market environment.
Trading strategy:
1. Consider reducing positions moderately when the index reaches above 3300 points, maintaining flexibility in adjusting positions. Generally, keep a position size of around 70% with a fluctuation range of 30%. Use flexible adjustments to respond to index movements without being fully invested, managing risks through capital allocation.
2. Avoid the risk of elevator-like drops in holdings during volatile periods. Set clear stop-loss and take-profit points for each holding, prioritizing profits over losses. Combine higher sell-offs with position-taking gains for quick reactions and decisions.
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