Market Broadcast Index Point Position Growth Shanghai Composite Index 2356.86 -0.42% Shenzhen Component Index 9622.83 -0.52% CSI 300 2536.07 -0.53% Stock Index Futures 1202 2533.60 -0.33% Hang Seng Index 21277.28 -0.41% Yesterday, the market did not continue its upward momentum from Wednesday, and the anticipated air pocket rally did not occur. Instead, there was a slight pullback, causing some investors to hesitate about whether to enter or exit the market.
In fact, since the market is not performing well, investors should simply observe its direction. Although the Shanghai Composite Index has broken through the downward channel since 3067 points, the rebound since 2132 points has formed an upward wedge. Connecting the highs and lows respectively forms the upper and lower tracks, making this wedge very clear. It is easy to see that Wednesday's rise did not exceed the upper track of the wedge, and yesterday's adjustment low point almost fell on the lower track of the wedge. Therefore, in general, the market fluctuation is still within the wedge, with no change in the operating pattern or rhythm. However, as the market evolves day by day, the space of the wedge becomes narrower, and the range allowed for market fluctuations also becomes narrower. This is the reason why the recent market has been stuck between rising and falling. With the passage of time, the market is approaching the top of the wedge, and the turning point is getting closer.
Yesterday's market once again saw a rare phenomenon: Construction Bank and Industrial & Commercial Bank of China (ICBC) both saw mysterious ten-thousand-lot buy orders, especially ICBC where these large buy orders concentratedly appeared. In response, Chairman Guo Shuqing clearly stated that blue-chip stocks have shown rare investment value, which fully indicates that although the index showed a small adjustment with a bearish star, major funds were quietly entering the market, laying out their strategies. With the endorsement of the CSRC chairman, it shows that the main force already has a plan for the future market.
The main force has its own layout, and the market has its predetermined path. A breakout is imminent, and we only need to observe in which direction the wedge breaks through. If it breaks upwards, the rally will continue; if it breaks downwards, a short-term sharp decline is inevitable. In such a case, high selling and low buying should be prepared, leaving enough ammunition, and then selecting potential individual stocks to buy at a low entry point.
Another point to note is that the investor education report recently released by the Shenzhen Stock Exchange pointed out that the delisting system of the Growth Enterprise Market (GEM) is like an arrow on the string. Investors who are enthusiastic about "speculation" should prepare themselves against the ultimate market risk of delisting. Combining the reform mindset and determination since Chairman Guo Shuqing took office, the delisting of GEM stocks may become a reality. Investors holding GEM stocks should carefully evaluate their quality to avoid stepping into a minefield.
By reporter Zhao Yan Jiang