Hexun Investment Advisor Gao Luming: Breaking News! New Developments! Will it stop falling today?

Last night, the peripheral markets received positive news, with European and American stock markets rebounding collectively. However, the situation in the Middle East has escalated again, bringing new uncertainties to the global markets. Can the A-shares market halt its decline and rise today? We analyze from both news and technical perspectives.

First, looking at the news. The situation in the Middle East continues to worsen. Iran’s top leader has rejected peace proposals with the United States and insists on claims; the Persian Gulf oil and gas facilities were attacked for the first time, and the UAE’s large natural gas field was hit by drones and suspended operations; additionally, a senior Iranian leader has been killed. These reports indicate that geopolitical conflicts show no signs of easing, which still negatively impacts global markets, including A-shares. However, as events unfold, market sensitivity to these developments is gradually decreasing. Future attention should be on whether there is substantial easing of the situation, which would be positive for global markets. Meanwhile, the pharmaceutical sector has seen some localized good news: China successfully achieved the world’s first regenerative islet transplant, opening new avenues for diabetes treatment. If this technology can be widely applied, it will be a substantial positive for related pharmaceutical companies.

From a technical perspective, there is a high probability of resistance actions during today’s trading. On one hand, the rebound in overseas markets helps repair market sentiment; on the other hand, after continuous adjustments, the A-shares have shown signs of bottom divergence. However, it is important to note that yesterday’s market struggled to break through the moving average resistance, with volume not only failing to increase but actually shrinking, indicating insufficient bullish momentum. The late-day plunge accompanied by increased volume suggests that the bearish forces have strengthened. All three major indices closed with medium-shadow lines yesterday, indicating that short-term downside momentum remains strong. Additionally, the market has broken below the 60-day moving average support near 4050 points, with new support levels around 4000 points and the 120-day moving average zone. Overall, whether there is resistance during the day or not, the probability of further correction remains high.

Until the short-term downtrend ends, the best strategy is to focus on defense. First, strictly control positions to avoid reckless heavy holdings, as heavy positions during a downtrend are a primary source of losses. Second, do not rush to bottom fish; without clear signs of stabilization or large capital entering, early bottom fishing is akin to laying mines. Regarding holdings, if individual stocks are oscillating at low levels without breaking support, it’s advisable to wait and see; but for stocks that rally and then fall back or show weak upward momentum, short-term correction risks should be guarded against.

（Author: Zhang Yan）

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