Investment Advisor Market Watch: Rebound and Recovery Again, Key Depends on Next Week

On March 27, He Xun investment advisor Gao Luming pointed out in today’s market analysis that the rebound has entered a critical phase. Next week, the market will undergo an important change, and it is highly likely that we will see the peak of this rebound.

From the market perspective, today the three major indices opened significantly lower due to external influences, but then showed a recovery, performing quite well, indicating that there are still protective funds in action. Today, over 4,300 stocks rose, so the general sentiment should be relatively positive. However, we observe that during today’s rebound, external funds have not entered on a large scale. The trading volume in the Shanghai and Shenzhen markets has actually shrunk by more than 90 billion. This indicates that external funds are still unwilling to enter the market in large quantities. Remember one thing, whether it is a wave of rebound or a significant low point and bottom, as long as external funds are reluctant to enter on a large scale, it will be difficult for the market to find a major bottom, and it is even very easy to see a short-term peak after a subsequent inability to rally.

From a structural perspective, the market is also gradually improving. On Monday, the market’s plunge created panic selling, followed by the first wave of rebound on Tuesday and Wednesday, yesterday’s pullback was the second wave, and today is actually the third wave of the rebound, entering a critical position of the third wave. If the market remains unwilling to increase volume next week, especially with the ten-day moving average acting as resistance above, it will be very easy to form a short-term peak. Once formed, after completing the three-wave rebound, it will likely lead to a pullback trend.

Additionally, as of today, the major forces, including large traditional sectors, are still unwilling to exert force. Although we see that the metal sector and large financial sectors have made some efforts, the extent of these efforts is too small, and the trading volume is still shrinking. This indicates that their current role is more of a protective nature, because if they were to attack vigorously, it would definitely involve strong volume. The insurance sector is still generally in the red today, so the first half of next week is a critical point. If it weakens again, there is a high probability that we will see the peak of this rebound, which may easily trigger another pullback and retest.

Of course, there is no need to panic excessively, because after the pullback is completed, it is the fifth segment of the third wave’s pullback. Once completed, there is a high probability that an important low point and bottom will form, which will be a crucial opportunity for bottom-fishing. Therefore, investors can try to take calculated risks; those with light positions can continue to wait for the market to rebound and look for high points to sell. Those who were heavily invested and couldn’t exit in time now need to wait for the rebound to reach a high point and then perform a T+0—sell high first, and then buy back after the major low point forms, which will be an important opportunity.

(Editor: Zhang Yan)

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