The second bottom is about to be completed, and the "Autobots" are all up to you!

Finally closed, another day of decline.

Yesterday it was hard to rebound, and today the three major stock indexes are lower across the board. The Shenzhen Component Index and ChiNext Index both hit new lows for the year, and the Shanghai Index also fell below recent lows, when will the downward trend be reversed?

Nearing completion of the second bottoming?

Although the "cold air" is pervasive and a little breathless, there is no need to hold back too much, and the turning point may be approaching.

As can be seen from the Shanghai K-line chart, on August 25 this year, the Shanghai Index fell to 3053.04 points, which is also the lowest point this year. Subsequently, on August 28, stimulated by favorable policies, A-shares ushered in the "8.28" counteroffensive market.

On the same day, the securities stamp duty was halved, and the CSRC launched a "three-arrow attack", intensively introducing favorable policies to boost the confidence of the capital market.

The 3053 low has become the standard "policy bottom", which has been agreed upon by all parties. Next, it is to wait for the emergence of a market bottom.

Today, the Shanghai index fell to 3057 points, only 4 points away from the policy bottom, which also indicates that the second bottom is nearing completion.

After the emergence of the policy bottom, everyone has fully discussed that the general market will experience a second bottom, and with the real emergence of the market bottom, the market will have a trend reversal.

What are the signals of the market bottom?

I believe that friends who understand the stock market a little can say it head-on:

1. Extremely shrinking transactions.

The daily turnover of the two cities is about 700 billion, which is at the absolute level of land volume.

2. Investors are depressed and completely uninterested in the market.

In the stock group around me, few people talk about stocks.

3. Overreact to negative and completely "ignore" favorable policies.

There have been a lot of good recently, but the market has not improved.

4. Companies announcing buybacks and overweights began to increase significantly.

There are announcements of buybacks or overweights almost every day.

5. "National team" funds enter the market.

Last week, Huijin has increased its holdings in four major banks.

6. Valuation levels hit new lows.

At present, the weighted average P/E ratio of Shanghai is only 13.25 times, the average P/E ratio of Shenzhen is 26 times, and the average P/E ratio of CSI 300 constituents is only 13 times.

……

Simply put, the emergence of market bottoms often appears inadvertently in the trading link.

Looking at our current market, whether the above six characteristics have basically appeared.

Therefore, if we look at the future trend of the index alone, it is likely that the market bottom is quietly approaching. However, with the completion of the "double bottoming", two situations may occur. One is not to break the previous low of 3053 and then quickly rebound. The second is a brief break, followed by a quick rebound. Which situation do you think it might be?

Cialis rose again to the limit

Next, let's talk about today's hot spots.

Today, only more than 500 stocks in Shanghai and Shenzhen have risen, and investors dare not expect hot spots.

However, if you want to talk about hot spots, there really is, that is, "Autobots"!

Today, individual stocks in the automotive industry chain are almost the only hot spot.

The first leader of this round of auto stock market, none other than Cialis, today it rose again and traded nearly 10 billion yuan, which is too strong.

Cialis's logic, or the sales of cooperation with Huawei exceeded expectations. According to reports, the new M7 has exceeded 60,000 units in Dading in one month on the market, which also puts huge competitive pressure on competitors Ideal Auto.

Of course, the sales of ideal cars are also strong, with sales exceeding 10,000 units in a single week. According to data released by Li Auto, in the 42nd week of 2023 (10.9-10.15), Li Auto's weekly sales reached 10,500 units, and as of October 15, Li Auto's sales this month have reached 17,800 units. A few days ago, Li Auto said that it will hit a new monthly sales high of 40,000 units in October.

In addition, BYD, the "king of the car stocks", announced a bright performance forecast last night, which also supported BYD's rise of nearly 5% today.

BYD disclosed the first three quarters performance forecast, and it is expected to achieve a net profit attributable to the parent of 20.5 billion yuan to 22.5 billion yuan in the first three quarters, a year-on-year increase of 120.16% ~ 141.64%. Among them, it is expected that the net profit attributable to the parent in the third quarter will be 9.546 billion to 11.546 billion yuan, a year-on-year increase of 67%~101.99%.

As for the reasons for the growth in performance, BYD said that in the third quarter of 2023, the new energy automobile industry continued to grow well, and the company's new energy vehicle sales continued to hit a record high, ranking first in the world's new energy vehicle sales.

Guojin Securities pointed out that BYD's performance in the third quarter exceeded expectations and its profitability was greatly improved. It is mainly due to the decline in the cost of the industrial chain, the smooth expansion of products going overseas, and the company's scale advantage and cost control.

What signal? These stocks moved at the end of the day

In other aspects, another focus of the market today is the concept of artificial intelligence, affected by the news of the limitation of AI chips, NVIDIA fell 4.86% last night, which had a significant impact on the concept of computing power in A-shares.

Today's computing power concept leading wave information volume fell to the limit, although the intraday board once opened, but finally sealed the limit board. Inspur Information is one of the largest distributors of NVIDIA in China.

In addition, Kingsoft Office was also affected for a while. In early trading this morning, Kingsoft Office's share price fell sharply, with the largest drop of nearly 12%. But then the stock slowly recovered and eventually fell by 4.83%. During the session, Kingsoft Office said in an interview with the media that the company is not affected for the time being, "at the beginning of the year, a large supply of computing power was prepared, mainly from major cloud service providers, and the company's reasoning and training computing power is sufficient."

Finally, after a lackluster market throughout the day, investors finally survived to the close. However, in the tail market collective auction stage, some funds engaged in a "sneak attack", and the collective bidding of many individual stocks soared.

For example, Hongming shares, the last single rose by nearly 16%. There are also Yutong Technology, Xiamen Tungsten Industry, Sanhuan Group, Yuanxing Energy and so on. What is the deep meaning of their sudden change in the tail market? Perhaps, tomorrow's market can give the answer.

Investing is risky and independent judgment is important

This article is for reference only, does not constitute a basis for trading, and enters the market at your own risk.

Cover image source: Daily Economic News Photo by Liu Guomei (data map)

Per reporter Zeng Zijian Per editor Peng Shuiping