【Double Festival Welfare】How to go A-shares before and after the National Day? These sectors have a higher win rate

The Mid-Autumn Festival National Day holiday is coming! Secretly tell you a secret, this year's holiday A shares are not open for 10 days, everyone can not only take 8 days off in a row, but also 10 consecutive days without losing money, is it joyful, think about it is very happy~

But Big A still has to open after all, I heard that A shares have always had the saying of "red October", in order to replenish the qi and blood of the green to flustered account, the editor painfully decided and studied how to layout in advance.

Is the "Red October" statement reliable?

Western Securities did such a study, they counted the historical data of the decade from 2010 to 2021, the data showed that the Shanghai Composite Index in October rose probability of 67%, the average return was 2.07%, the median increase or decrease was 1.07%, and the performance in the whole year was second only to February.

Therefore, from the perspective of historical law, it is true that the winning rate of the "rise" of the market in October is higher.

【Double Festival Welfare】How to go A-shares before and after the National Day? These sectors have a higher win rate

(Image source: Western Securities Research Report "Strategy Special Report: Be cautious before the National Day, pay attention to independent and controllable direction", release date: 2022.9.18, does not represent the views of Tiantian Fund, does not make investment recommendations)

But pay attention friends! Don't rush in now, Western Securities also found that with the National Day holiday as the dividing point, the trend of A-shares before and after the holiday is completely different, and the dominant industry sectors are also different.

How to go to A-shares in the week before and after the National Day?

Statistics on data from 2013 to 2022 for the past decade found that:

In the five trading days before the National Day, the Shanghai Index rose only in 2014 and 2018, and fell in the rest of the years, with a decline probability of 80%. In the past three years, the week before the National Day has fallen by an average of about 2%.

In the 5 or 10 trading days after the holiday, the Shanghai Index in the 10 years from 2013 to 2022, the index rose for a total of 7 years, accounting for 70%.

Even if A-shares rise before the holiday in a few years, they will fall after the holiday, such as 2014 and 2018.

(Data source: Oriental Wealth Choice data, as of 2023/9/15, no investment recommendation)

Why is that? There are three main reasons:

1) The end of the quarter is coming, everyone has to withdraw money for the holiday, the capital surface is tightened, and the market volume is shrinking.

2) Absolute returns should take profit and lock in this year's earnings in advance.

3) Worry about risk events at home and abroad during the long holiday, and actively avoid risks before the holiday.

Therefore, the market characteristics of reducing positions before the holiday and hedging and increasing positions after the holiday have been relatively obvious over the years.

Which sectors have a higher winning rate?

So specific to the sector, how should we lay out the "Red October" market? Western Securities counted the market data for the decade from 2010 to 2021 and obtained:

From the perspective of style, the pre-holiday consumer industries (household appliances, pharmaceuticals and biology, food and beverages, automobiles) are dominant, and the allocation value of the financial industry (banks, brokers, insurance) after the holiday is revealed.

The National Day holiday is often a time when tourism consumption is more active, and consumption performed well in the 10 and 5 trading days before the holiday, achieving excess returns of 1.50% and 0.55% respectively. If the number of holiday travelers exceeds expectations, the consumption growth rate is higher, which can also promote the trend of consumer stocks after the holiday.

Subdivided into sectors, in the 10 trading days before the holiday, household appliances, pharmaceuticals and biotechnology, food and beverages, and automobiles performed relatively well, with an average excess return of 0.48%, 1.38%, 2.59%, and 0.50% in the decade from 2010 to 2021, and a win rate of 83%, 67%, 67%, and 50%.

In the 10 trading days after the holiday, household appliances still maintained good market performance, with an average excess yield of 0.97%. The performance of the financial sector and other essential consumption also rebounded significantly, with the average excess returns of non-bank finance, banking, machinery and equipment and agriculture, forestry, animal husbandry and fishery in the 10 trading days after the National Day being 1.92%, 1.54%, 0.61% and 0.34%.

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