Hexun Investment Advisor Liu Changsong: V-shaped Rebound Is Not Simple, Expect Volatile Bounce, Anticipate Broad-Based Gains

This deep V rebound is not simple. The reason is straightforward: the Shanghai Composite Index closed lower. Why did the Shanghai Index close down? The reason is also simple: it was dragged down by heavyweights such as non-ferrous metals, steel, coal, electricity, and chemicals. However, the Shenzhen Component Index, ChiNext Index, and STAR Market 50 Index all closed higher. The reason for the ChiNext and STAR Market 50 indices being up today is driven by big tech companies. Recently, big tech has been performing poorly, and the market has lacked profit opportunities. If big tech can start to rally, it will attract off-market funds, making trading more favorable.

Huxun Investment Advisor Liu Changsong said, "Today, the average stock price index rose by 0.41%. Most stocks are up, with 2,843 stocks gaining. At this level, the short-term index can be expected to stay around 4100, indicating a potential broad rally. Structurally, it’s simple: the three long lower shadows show strong support below. Everyone understands who is buying and who is selling at these levels. How does the Shanghai Composite Index look? First, it’s around 4100 points, which is the 5-day moving average. On the 60-minute chart, if indicators recover, dual golden crosses usually lead to a rebound. On the 120-minute chart, if indicators recover, dual golden crosses also suggest a rebound. So, Shanghai is expected to oscillate and rebound, while Shenzhen shows relative strength.

Today, Shenzhen closed near the 5-day moving average. Looking at the 60-minute chart, with the indicator above 50, and the 120-minute chart also above 50, it indicates relative strength. The market is still oscillating and rebounding. The ChiNext Index appears relatively strong. Note that the STAR Market 50 Index shows a small double bottom pattern. In the short term, watch whether the 5-day moving average can hold. If it does, analyze the upper boundary of this range. Also, observe today’s advance-decline ratio and sentiment indicator, which are currently recovering. Such recovery suggests that a broad rally can be expected in the short term, within a day or two, as it follows a regular pattern.

(Edited by: Shao Xiaohui)

【Disclaimer】This article reflects only the author’s personal views and is not related to Hexun.com. Hexun.com maintains neutrality regarding the statements and opinions expressed in this article and does not guarantee the accuracy, reliability, or completeness of the content. Readers should use this for reference only and bear all responsibilities themselves. Email: news_center@staff.hexun.com