A shares rebound! Has the market bottom passed?
The A-share market ushered in a long-awaited surge. The Shanghai Composite Index soared nearly 4% in a single day, and the turnover of the whole market exceeded 970 billion yuan. Does this mean that the bottom of the market has been confirmed and a new bull market is about to begin? Let's break it down.
A key signal of a market reversal
The rally came a bit suddenly. The market was in a downturn one day, and the next day it suddenly exploded. The most immediate trigger was a series of major economic initiatives jointly issued by the three departments. Although the specific content has not yet been announced, this news alone is enough to ignite the market's passion for longing.
The amplification of volume is the most obvious signal. The turnover of the whole market reached about 970 billion, an increase of more than 400 billion over the previous trading day. This shows that there is a large amount of money pouring into the market, and investors' willingness to trade has increased significantly. In particular, the net inflow of domestic capital reached about 28 billion, which may mean that some large institutions began to increase their positions.
From the perspective of index performance, major indices such as the Shanghai 50, Shanghai 500, and CSI 300 all rose by more than 4%. The CSI 1000 and CSI 2000 indices also rose by about 3%, although the gains were relatively small. This situation of full flowering is not like simple speculation.
There is a mystery hidden in the rotation of plates
Looking at the performance of the sector, the diversified financial sector is unbeatable, rising by more than 8%. The securities sector has also broken above the long-term trend line, which is likely to signal a major positive policy in the financial sector. After all, there is no industry that directly stimulates the economy more than finance.
The semiconductor sector is also on the offensive line, and the performance of this high-tech sector is worth watching. You must know that semiconductors are a strategic industry related to national security. If this sector can continue to strengthen, then the entire tech sector is likely to dance with it.
However, there were some sectors that were underwhelming. For example, the defensive sectors such as consumption and medicine have risen relatively little. This may reflect that investors' risk appetite is increasing and they are starting to chase higher risk, higher return sectors.
The technical side still needs to be seen
From a technical point of view, this rally has indeed broken through a number of important hurdles. The Shanghai Composite Index broke through the 60-day moving average and the semi-annual line in one fell swoop, which is an important signal in technical analysis. If these moving averages can be held firm, then the medium-term trend is likely to have reversed.
However, we should also note that the index has not yet broken through the annual line. Moreover, there may be a lot of pressure near the previous high of 2900. Therefore, although the momentum of the short-term rally is sufficient, it will take more time and greater volume to confirm the change in the medium- to long-term trend.
Policy is the key
In fact, the biggest driver of this rebound is the policy side. The three departments jointly announced major initiatives, which was rare in the past. Although the specific content has not yet been announced, judging from the market reaction, investors have high expectations for this policy.
Some analysts believe that this policy may involve many aspects such as RRR and interest rate cuts, real estate bailouts, and stock market stability. If that's the case, it would really go a long way in boosting confidence in the economy and the stock market.
However, we should also note that the effects of policies often take time to appear. Moreover, the external environment is still complex, and factors such as slowing global economic growth and geopolitical risks may affect the effectiveness of policies.
How should investors respond?
For ordinary investors, this rally is undoubtedly good news. But don't be blindly optimistic, after all, one day is not enough to change the long-term trend.
My advice is to increase your position moderately, but not to chase higher. Focus on sectors with policy support, such as finance, technology, etc. At the same time, risk management is also important, after all, the volatility of the market may increase.
Overall, this rally has really given the market a shot in the arm. But whether it can start a new round of bull market will take more time to verify. Investors, do it and cherish it, and it may be the best choice to maintain a cautious and optimistic attitude.
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