Folk wisdom丨Rebound or reversal

Moderator | Yin Xing

The bottom grinding is halfway through

Moderator: The index will build a composite bottom, and the boat has been talking about it for nearly a month, but hasn't it been built yet?

Rafting: Let me start by asking you what is a composite bottom?

Moderator: Isn't the compound bottom a bottom pattern that pulls back and forth in a low range?

Since it is a back and forth, how much were the Shanghai Composite Index and the CSI 300 Index three weeks ago?

Moderator: The Shanghai Composite Index is about 2,890 points, and the CSI 300 Index is at 3,300 points.

Rafting: Now the Shanghai Composite Index and the CSI 300 Index are also around this point, isn't this called pulling back and forth? So the index is still in the process of building a compound bottom.

Moderator: How long will it take?

Rafting: I've seen the longest at four months, and the shortest one starts at two months. The length of time to build a bottom directly determines the level of the subsequent market.

Moderator: Understood, the longer the bottoming time, the greater the level and higher the amplitude of the future rebound?

Rafting: The difference between time and space, either the rebound period is long, or the rebound is large. Anyway, the current short-term atmosphere is very good, the hot sectors are very clear, and everyone doesn't have to think too much about the index.

Moderator: Don't worry about the index, most people can't do it.

Rafting: Normal! Because the individual stocks in my hands have fallen, I have the habit of thinking, thinking that the index can rise when the individual stocks rise, but it doesn't matter. There are also people who lose money in the bull market of the index, and there are people who make money in the bear market. The bull and bear of the index has nothing to do with whether you make money or not.

Moderator: You don't think you praised you this week, right? Let's put it this way, looking back, your meeting in October was worth a thousand gold, I thought about it carefully for a long time, and still used these four words of comment. Lying down to win is your signboard, you didn't consider A shares at all, this is the first time in the world, this alone makes people applaud. For several months, the situation of the people of A, needless to say, who buys who knows. As for the layout that everyone is concerned about, you can briefly talk about it later. It's almost enough to praise you, it's useful, what do you think of the subsequent index fluctuations?

Rafting: Continue to grind the bottom, this week's rise, at least a little certain, the bottom grinding into the halfway. And the further back you go, the less uncomfortable it will be, because the short-term freezing point also appeared on January 22.

Moderator: I know that, you wrote directly on the blog that day.

Rafting: As soon as the freezing point passed, the scene of individual stocks flying sideways began again. The follow-up index is the bottom of the index, and everyone can do a good job of individual stocks. In terms of configuration, I won last October, and this week I eliminated one of the Nasdaqs. The increase is not small, but the position is not large, and mosquito meat is also meat, mainly worried that the high premium action of some ETFs will hurt the innocent. The rest just continue to go according to plan. It's okay now, the short-term and configuration are clear, and we will share the details with you at this Sunday's online exchange meeting.

Freezing three feet is not a day's cold

Moderator: Speaking of the over-falling rebound that only appeared in February, it was launched due to the early landing of the RRR cut, Xiao Xiao analyzed, can the rebound here be interpreted into the spring market in 2024?

Sea breeze like rain Xiao Xiao: Last week, we discussed the emergence of "negative feedback", after the release of the pressure of more killing, it is easy to bottom out and rebound the market, but the space for recovery still depends on the strength of the policy. The market consensus is that monetary easing will be intensified in 2024, but the anxiety of "waiting for a long time" and the decline in the market will inevitably affect the market's confidence. The central bank's RRR cut has changed from the rhythm of 0.25% each time for many years to 0.5%, which has significantly increased the intensity of monetary easing and played a greater role in boosting market confidence. The RRR cut is already coming, will the interest rate cut be far away?

Moderator: Last week, you also discussed that the CSI 300 index needs to be "lifted" before the market can be "hard", and this week the market has launched a hype around the theme of "China Special Valuation", which has given full play to the index weight effect of this sector and contributed to a strong rebound in the market.

In fact, from the fourth quarter of 2022 to the second quarter of 2023 for most of the year, "China Special Valuation" has been operating with TMT in a "two-wheel drive" mode. "China Special Valuation" with index, TMT with popularity, the two complement each other, and well maintain the structural market of the disk. As for whether it can be interpreted into the appearance of the spring market, there is an idiom in China - a single tree does not go into a forest, so it needs the cooperation of the growth stock sector. Does it work to single the high-dividend sector?

Moderator: Investor sentiment has improved this week, can you be optimistic?

Sea breeze like rain Xiao Xiao: investors need to be reminded that the market since August, there has been an unprecedented monthly line six consecutive negative trend, which reflects that there are many difficulties in the market, freezing three feet is not a day of cold, under normal circumstances, the reversal of this continuous decline to complete the bear and bull conversion needs to be technically on the 60-day moving average to form a "three dozen white bones" or even "four crosses of the red water" impact can be realized. Typical example, in 2018, the market finally completed the market reversal in accordance with the "Four Crossings of Chishui" model, and further, the market from 1783 points in April 2004 to 998 points in June 2005 was also completed in accordance with the "Three Dozen White Bone Essence" model. At present, the observation of the market should still be in the process of the second round of hitting the 60-day line, and the probability that the market will complete the bear-bull conversion is still very low.

Rationally examine the two heavenly groups

Moderator: This week's index rushed to 2887 points, and the direction of the force is the beginning of the Chinese word. However, for most people, the early fall is "really miserable", and now even if it rises so clearly, most people just look at the rebound, you are the most firm judge of the bottom, how to see it later?

Sun: I'm still firm at the bottom, although there may be volatility ahead. The reason why the market generally does not dare to look at the bottom easily is that there are indeed many known major problems that have not been solved, and there are indeed snowballs that have not been liquidated, and there are no crazy liquidations of major funds, and there are no liquidations of the two financial and pledge orders. Before the former was solved, and before the latter was completely exploded, everyone was scared. But what I want to say is that when the index does not fall below 2863 points, is there no such problem? There must be, to put it bluntly, it is the herd mentality, that is, it is dominated by fear. As we said before, even if the index falls sharply for a few days in the face of bearishness, it has the conditions to be quickly pulled back within 2 or 3 days. The morphological structures such as the prefix and the operator are ready to fight back at any time, isn't it? At present, we can clearly see that the over-falling varieties mentioned before are not one or two, but a large number of them. After this week's weighting, these will start to perform next week, especially the small-capitalization leading companies in the growth industry segment. Reflected on the index, it is to continue to fluctuate for a few days, let the short-term over-rise indicators be repaired, let the stocks that have not been adjusted continue to adjust, and consume the potential short-selling momentum in the later stage in the shock. Let the real over-falling small-cap potential stocks take over. This week, the news of the market value management of central enterprises was introduced, but don't forget that the important market position of the private economy has been repeatedly mentioned and highlighted before.

Moderator: What do you want to say?

Jiaoyang: If the small and medium-sized private economy is good, the future will be better. From this point of view, both in terms of policy and capital supply, we can continue to look forward to it. Reflecting on the stock market, it is a historical opportunity to strengthen the leader of the low-capitalization growth segment industry.

Moderator: Although the market has exploded this week, it feels like it is still making money from the index.

Jiaoyang: This is inevitable, it has been repeatedly said that half of the stocks will be difficult to perform when the index bottoms out, which is the helplessness of limited market funds corresponding to unlimited chip supply. From this point of view, position management and sub-position planning are very important, once you get the wrong ticket, and make a large position, and do not stop loss, then no matter how good the market may not be your share. The selection of individual stocks, the fine division of positions, and the strict control of total positions are what every qualified investor should keep in mind.

Moderator: The strongest ones this week are the central state-owned enterprise Tiantuan and the Shanghai local Tiantuan, how do you think of their later performance?

Sun: Contrary to the market's perception, I don't have too high expectations. The former is because the market value management is not difficult, not that you can manage it well if you want to, it is good to go slowly in accordance with the technical structure, too fast is not good, take your time, and steadily go for 2 or 3 months of rebound, which mainly plays the role of setting up a stage. Everyone knows that the latter is a hot spot, but how many of them are involved in the first board? Most people who look at this sector are basically watching dramas every day, blowing every day, there is no meaning, pure ultra-short-term, in contrast, the former is better, many central and local state-owned enterprises are superimposed AI, data, Huawei and other popular tracks, low location, low price, low market value is not a few, this purely relying on technical analysis is also relatively easy to find opportunities.

(This article has been published in the January 27 issue of Securities Market Weekly, and the individual stocks mentioned in the article are only for analysis and not investment advice.) ）