Recently, Morgan Stanley, Goldman Sachs, UBS, and other foreign giants have been bullish on China and A-shares.
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1. Foreign capital sings more about China, Chinese assets have exploded, and the bull market is coming?
The mouths of foreign investment banks have not been opened, and there is no need to take to heart their remarks about singing long and short. In July 2022, foreign giants were also collectively singing long A-shares, but in the past three months, tens of billions of foreign capital have fled, resulting in a succession of A-shares. At that time, there was a lot of singing, obviously with ulterior motives.
This time is different from the last time, the last time was a relatively high level when the big rebound was around 3,400 points, and most of the singing at that time was to cover the escape. This time the stock index is at a relatively low level near 3,000 points, the construction of the investment side of the capital market is accelerating, the momentum of domestic economic recovery is increasing, China's core assets are the global valuation depression, the value attraction is super high, this time the collective singing of foreign capital is in line with reality, not groundless or ill-intentioned. In February and March this year, foreign investors bought more than 82.7 billion yuan of A-shares, which was very strong.
The Shanghai Composite Index has been oscillating around 3000 for more than a month, when will the bull market come?
The longest bear market in the history of A-shares was 48 months, and that was after a few years of sharp gains. In the last round of structural bull market, the Shanghai Composite Index rose by only 53%, the smallest increase in the previous bull market. A small increase means that the market valuation bubble is small, and the adjustment time should be shortened. Since the peak of the bull market in February 2021, it has been 39 months since the adjustment, and the time period has been overshooted. In other words, in terms of time cycle, A-shares have been fully adjusted in place, and a new round of bull market can be launched at any time.
From the perspective of adjustment space, market valuation, policy orientation, and economic situation, the basic conditions for a round of bull market in A-shares have been met, and the only thing lacking now is confidence. The market has not completely heated up, the market money-making effect has not yet improved, and the over-the-counter funds are not active in entering the market, resulting in a large number of people in a wait-and-see state, even if the benefits are very good, they are directly ignored.
This is also the case in the big bottom area of the bear market in the past, because the bear has been numb for too long, and the memory of the bull market has been forgotten. The best way to break the deadlock is to increase the rise in the super positive, and continue to rise sharply in the form of short squeezing, so as to create a money-making effect in the market, and rise to the point that everyone is excited, and there is no worry that the funds will not come in. Funds are all profit-seeking, and with a good opportunity to make money, how can you be indifferent?
The start of the bull market is always very sudden, always when everyone is not expecting to suddenly erupt, the problem in the market hesitates when the continuous rise, and when you realize that the bull market is really coming, the market has already risen a lot, chasing if you are afraid of a pullback, not chasing if you are afraid of continuing to rise, will be very passive. In my opinion, the best time to lay out a bull market is to ambush in the bear market big bottom area, rather than waiting for the so-called lowest point.
Second, there are new trends in the market, is it time to adjust positions and exchange shares?
This week, medicine and medical care have repeatedly strengthened, and even risen against the trend, which was unthinkable last week. The emergence of this phenomenon shows that the main force is adjusting positions and swapping shares, trying to absorb the big health track and prepare for the next stage of the market.
We should pay close attention to this trend, if there is a continuous increase in medicine and medical treatment, it is the performance of the main bottom of the scramble, and the market may switch between high and low after the holiday. If medicine and medical care, new energy, and big technology rise, high dividends, dividend indices, oil, gold, banks, coal, etc. may be adjusted.
3. Analysis of mainstream sectors
1. Hang Seng Technology
Hong Kong stocks have been significantly stronger than A-shares this week, with the Hang Seng Index, Hang Seng Technology, and Hang Seng Medical rising one after another, and China's core assets being scrambled.
From an international perspective, the stock markets of Europe, the United States, Japan and India are at a historic high, and the A-share and Hong Kong stocks are at a historic low, and the cost performance of medium and long-term investment is much higher than theirs, and it is impossible for international capital to let go of this important opportunity. Once the Fed's interest rate cut expectations are strengthened or officially cut interest rates, it is inevitable that foreign capital will return to A-shares and Hong Kong stocks. In particular, Hong Kong stocks are more sensitive to foreign capital trends, and the completion of the market may come to a large wave of valuation repair.
Yesterday's dissolution emphasized that Hang Seng Technology and the Hang Seng Index are not suitable for chasing higher here, because they rushed to a strong pressure level. Today, both rushed up and down, which means that the upper pressure is at work. The medium-term is bullish, and the short-term is more inclined to oscillate a little more to release the selling pressure.
2. CSI data
The CSI data began to rebound after a small 5-wave killing, and has not yet touched the small resistance level at the white line, but the trend has entered the critical point of change: the MACD has reversed to the 0 axis. If the death cross here is downward, it will test the purple line support, and if it can force a break through the 0 axis, rush through the pressure of the white line, and then step back to no new lows, this wave of correction will hopefully end.
After more than a month of adjustments, the technology sector is almost in place. Even if it falls again, the space should not be too large, and a wave of rebound is worth looking forward to.
3. Non-colored
Once the cyclical sector is on the upswing, it often shows amazing explosiveness and continuity. "If you don't open for three years, you will eat for three years!" refers to the continuity, explosiveness and waveliness of the pro-cyclical sector. When the upward cycle comes, it can go straight to the moon for nine days, and when the downward cycle comes, it can fall to doubt life, and the market style of big ups and downs is especially suitable for big swings.
The macroeconomic operation determines the prosperity of cyclical industries, affects the profitability of listed companies, and then affects the strength of the market. As a result, the rise and fall of pro-cyclical sectors is highly correlated with the economic cycle.
With the favorable implementation of a series of national policies to expand investment and promote steady growth of consumption, the momentum of economic recovery has been further strengthened. The economic indicators in the first quarter are obvious: the total profits of industrial enterprises above designated size have increased sharply and turned positive, and the manufacturing PMI has returned to the expansion range. The medium-term economic recovery is good for cyclical sectors, which is also the internal driving force for the sharp rise in small metals such as copper and zinc in recent months.
Under normal circumstances, the market's speculation on cyclical sectors will be a few months before the economy stabilizes and rebounds (because the market likes to speculate on expectations), and after the strong economic recovery, the stock price will already fly to the sky.
I am more optimistic about the cyclical plate market, referring to the historical market is basically a time span of two or three years, the previous wave of rebound to the non-ferrous cyclical plate belongs to and a wave, and there is a high probability that there will be a second and third wave of the market.
In the cyclical sector, I am more optimistic about non-ferrous metals and chemicals, and the elasticity of steel is poor, so I will not consider it for the time being; coal has risen to the sky and has not come down, and the upside space has been overdrawn in advance, and I will not consider it; the chemical elasticity is good, but now it is not on the hot spot; in contrast, I am more optimistic about the explosive power of the non-ferrous band, and the spot prices of gold, silver, copper and zinc have risen sharply, forming a positive stimulus to the market.
From the perspective of market rhythm, it is currently in the adjustment period after the end of the first wave of rises, and there is no clear signal to stop falling, and there is a tendency to test the white line support level in the short term.
The low-altitude economy is constantly good, and the tide of individual stocks is rising and falling at every turn, which looks very attractive, but the short-term risk is not small, what do you think?
Finally, please give a thumbs up, give encouragement and support, thank you very much!
The above content is personal opinion only and is not intended to be instructive. The mention of individual stock funds is only to record market views and the actual operation process, and accumulate materials for future creations, without making any recommendations, please do not blindly follow up. Past performance is not indicative of the future and investors should be aware of the risk of market volatility.