The key focus of the major index has slowly shifted downward, with the daily KDJ continuing to decline and the MACD red histogram continuing to contract, indicating the possibility of a short-term retracement. However, the 60-minute KDJ indicator shows dullness at the bottom, suggesting limited room for the index retracement. Close attention should be paid to the support in the area between the 10-day moving average and the 20-day moving average. From the intraday trend, after a prolonged period of oscillating rebound, the market experienced a quick downturn in the late session, showing clear signs of short-term profit-taking. As the index enters a heavy pressure zone, enthusiasm for the weighty sectors declines, potentially marking the end of the valuation recovery rally since the 2132-point level.
From the trading volume over the past three trading days, as the index oscillates downward, the trading volume has shown an evident contraction trend, which on one hand indicates that the main funds have not significantly reduced their positions; but on the other hand, it also shows that the承接力below is starting to weaken. The balance of power between bulls and bears is subtly changing, and close attention needs to be paid to the movement of the weighty sectors and changes in trading volume in the future. Operationally, investors are advised to wait for the index to adjust fully before adding positions opportunistically.
Affected by external factors, both the Shanghai and Shenzhen markets opened lower and then narrowly oscillated around the 2430-point level. Trading volume has continuously contracted for four trading days, presenting an adjustment trend. After probing the 10-day moving average, the index showed signs of stabilizing, with widespread gains in individual stocks. Both markets closed with small阳lines with upper shadows. Volume contraction during adjustments indicates a healthy market. We believe the rebound will continue amidst oscillations. The market awaits the clarification of substantial policy benefits and clearer sector rotation.
Yesterday, after digesting the adverse news about property control, the market began to repair the moving average system today. Entering the two sessions period, the market is expected to enter a phase of oscillation consolidation, building a platform for operation. Therefore, operationally, we suggest that investors take advantage of the market's oscillatory rhythm and capture good opportunities for low-position layouts when the index continues to probe the bottom. Focus on investment opportunities in environmental protection, new energy, and high-tech concepts such as electronic information.
Overall, the index still oscillated throughout the day, with the center of gravity gradually shifting downward. The sluggish performance of major blue-chip stocks weighed on the index. In addition, market trading volume continued to contract, weakening market participation enthusiasm. The short-term rhythm of index oscillation and adjustment will continue. For current operations, temporarily reduce operational frequency, observe more and act less, waiting for the market to adjust fully before entering the market opportunistically. Short-term varieties can focus on those with sufficient technical preparation and re-initiating strength.
Since February, the number of newly added fund accounts has increased for three consecutive weeks, and new funds are expected to bring more than 18 billion yuan of incremental funds. However, according to estimates by major institutions, the fund position has already increased to over 80%, approaching the so-called "88 curse," and many funds may reduce positions in advance. Moreover, the net profit growth rate of 291 companies in the ChiNext board was 13.8% in 2011, showing a significant slowdown. New loans in February are likely to fall below one trillion yuan, and CPI may drop below 4%, possibly ending negative interest rates. From the perspective of index operation, small and medium-sized capitalization stocks still face short-term technical adjustment pressures, but the gradual recognition of blue-chip stock values by investors reduces the impact on the market. The mid-term upward trend of the index remains intact.
Starting this week, the shorts began to shift from defense to offense, but the longs were unwilling to give up. Judging from the first four trading days of the week, the index declined slowly, and the probability of a weekly K-line closing down is relatively high. Although the two sessions are about to convene and policy benefits keep coming, the fundamental decline in the economy is the foundation that the stock market cannot avoid. Next week, macroeconomic data for February will be announced, and time is not on the side of the longs in the short term. Operationally, we suggest investors sell on rallies and avoid short-term adjustments.
On Thursday, the market showed a narrow-range oscillation trend, with individual stocks showing a broad-based rise. The daily K-line closed as a small阳line with an upper shadow, and trading volume contracted by about 20% compared to the previous day. The short-term moving average divergence trend did not change, with the 20-day moving average crossing above the half-year line. However, lacking trading volume support, attention should be paid to the support of the 10-day moving average on short-term callbacks. The MACD indicator remains in the bullish region, but the recent inability of the bullish red histogram to expand continuously, along with the high-level death cross of the KDJ indicator, indicates a technical requirement for short-term adjustments. Market hotspots remain unclear, continuing the catch-up trend. Resource sectors like non-ferrous metals and coal find it difficult to initiate a second wave, while the real estate sector faces adverse news pressure. Without sustained hotspots, short-term adjustments in the market become the main trend. News on the message board is mixed, although Chairman Guo's words are thunderous, no substantial favorable policies have been introduced. Most realistically, the pace and quantity of new stock issuance remain high, and blue-chip stocks have not received active response from market funds. Therefore, we advise investors to operate cautiously in the near term, paying attention to changes in market trading volume and hotspot trends, controlling positions well.
Operationally, the sustainability of bullish sectors is weak, hotspots are chaotic, and the difficulty of grasping them has clearly increased. With continuous volume contraction, there is a further adjustment requirement for the short-term market. For stocks that have gained significantly recently, it is advisable to liquidate on rallies, observing more and acting less, watching the evolution of the market trend quietly.
The index maintained an oscillation trend throughout the day, with the center of gravity continuously shifting downward. The sluggish performance of major weighty blue-chip stocks dragged on the index. Currently, the index is consolidating narrowly between the five-day and ten-day moving averages. Can the ten-day moving average provide strong support? It depends on whether the weighty blue-chip stocks can stabilize. Another factor in the adjustment of the market is the technical correction. Last week, the market surged with abnormal volume expansion, reflecting the divergence stage between bulls and bears. On Monday, the market rose and then fell back, closing with a long upper shadow. A high inverted hammer suggests that the upward pressure should not be underestimated. Severe divergence of the Kdj indicator followed by another death cross, along with the continuous convergence of the macd, all show signals of short-term weakness in the market, indicating the need for further adjustments.
The index adjusted strongly, with more gains than losses in individual stocks. In the afternoon, under the drag of a sharp decline in Hong Kong stocks, the Shanghai Composite Index retreated somewhat, but the futures index adjusted more significantly, making it highly possible for the Shanghai Composite Index to open lower on Friday. Driven by industry benefits, the electronic payment, electronic information, and digital television sectors led the gains; the real estate sector rebounded with reduced volume, with low-priced real estate stocks such as Huaxia Happiness, Zhejiang Guangsha, Zhongjiang Real Estate, and Guancheng Datong leading the rally. Due to volume contraction, the real estate sector has a low probability of setting new highs in the short term, and a high-position consolidation is more likely; Bernanke's speech lowered expectations for Q3, with gold and rare resources like non-ferrous metals leading the declines. International shipping prices rose universally by over 50%, and the price increase in U.S. daily necessities is certain. Price increases will suppress consumption, which is detrimental to economic recovery, and the call for Q3 will arise again. Therefore, gold stocks can be accumulated on dips.
We recommend investors appropriately replenish the high-sold positions, conduct swing trading, and pay attention to changes in volume, support of the ten-day moving average, and the trend of market hotspots, controlling positions and operating cautiously.
Today, the index opened lower but moved higher, encountering resistance when challenging the 5-day moving average and ultimately closing with a minor adjustment of 5 points at 2423, forming a small阳line with a short upper shadow. Especially, the 10-day moving average below did not make contact throughout the day, indicating the presence of a force allowing the market to stabilize short-term above the 10-day moving average. Furthermore, after the trading volume contracted to around 71 billion, it becomes even more evident that there was no panic selling during the adjustment period, and the short-term reluctance to sell in the market is quite concentrated. Therefore, from today's relatively contracted small阳line, it can be seen that the downward trend of the market has slowed down. We believe that even if the adjustment continues in the future, the estimated space will not be too large, and the possibility of the index building a platform for consolidation above the 2400-point level becomes increasingly strong.
Technically, the major index closed with a mix of gains and losses, forming a false line on the daily chart. The index lost the 5-day moving average for two consecutive days, and the hourly chart showed a very weak trend. Technically speaking, due to the late-session plunge today, the market may seek support by declining further on Friday, and it is not impossible for the market to break through the 10-day moving average.
Although the market has experienced multi-day oscillation adjustments, there has been no market-worrying crash, but rather a slow decline. From the current technical perspective, the market's adjustment is just a normal pullback after breaking through the 144-day moving average. Since the market has stood above the 144-day moving average for many days, and judging from today's volume contraction, the market trend appears relatively normal. A common trend is to see volume expansion for breakout, then volume contraction for pullback, and then volume expansion for another breakout. Here, it is necessary to mention the volume expansion on Monday, reaching a level of 1.4 billion yuan, which indicates that the pressure around the 2500-point level has been largely relieved. The filling of the gap directly indicates the market's strong determination, do not forget that this gap is a confirmation-type gap for adjustment. Therefore, the significant volume expansion for filling the gap clearly points out that 2480 points may not be the high point of this rally, and the possibility of the market setting a new high later is considerable. This is the process mentioned earlier of another volume expansion for breakout. During the market's next attempt to challenge the 2480-point area, what we need to pay attention to is that if the market can achieve a volume expansion breakthrough at 2480 points, then it will directly assault the high point of 2530 points in November last year; however, if this attempt fails, the result might be the formal start of the second wave adjustment.
Today, both markets continued to oscillate, with small-cap stocks performing relatively actively. The official PMI index released today further rebounded, boosting market confidence. Although there was some retreat in the late session, the 10-day moving average and the rising trend line since the rebound from 2132 points provided strong support, and the index is expected to maintain oscillation near the 5-day moving average in the short term, but the space for deeper adjustment is not large. Regarding yesterday's collapse of global commodities, we believe that due to the overall loose monetary environment globally, commodities will remain at high levels, and short-term adjustments will not affect the medium-to-long-term trend of commodities. Operationally, investors with heavier positions are advised to remain cautious and can appropriately reduce positions on rallies to protect profits. Investors with lighter positions can pay attention to the wave opportunities in quality undervalued blue-chip sectors such as non-ferrous metals and coal, as well as some theme stocks with smaller previous gains on dips.