Hexun Investment Advisor Wang Yu: A surge of 56 points, the market is still likely to focus on rotation and recovery.

Today’s market action saw a gap-up driven by positive moves from overseas. However, afterward there was no further surge in volume to push higher. Whether looking at trading volume or the momentum of going long, there wasn’t any additional strengthening. According to Wang Yu, an investment advisor at Hexun, judging from the two relatively strong directions at the open—innovative drugs and computing power—the leading issues that got cornered in the bidding phase should have reversed and reflected that momentum, and those that were supposed to hit the limit-up should have. But compared to that, they weren’t as proactive; they all showed pullbacks to different degrees, which meant the strength of the sector was indeed limited. Then there was the divergence in commercial aerospace. The Shenjian fell short of expectations from the opening bid onward, which led to other companies in the sector having their bids repeatedly cashed out. By the afternoon, although each sector showed strength, it didn’t continue to move higher. During the index’s gap-filling and recovery, there was some repair and an attempt to surge, but it still couldn’t form a consensus breakout and strong advance. Even though the rebound had relatively more in the index, and in terms of the number of rebounders and the average stock price, the performance still looks good; however, throughout the day there were 38 stocks that hit the sell-off after limit-up (board failures). Compared with yesterday, that’s more than double. Yesterday was a day where the index sold off and then led to more board failures, but today the index surged higher—and yet the number of board failures was even greater.

From this, it’s clear that the effect of going long today was indeed not good. The market going forward is likely still dominated by rotational repairs. Everyone should be careful about chasing price. Also, one more reminder: the current highest-limit board is 4 boards; below that is 2 boards. If tomorrow’s private message I fail, then the lower 2-to-3 step can be considered, since the negative feedback from the high-limit names has been continuing for three straight days. The market sentiment for short-term trading has been at an all-time low for consecutive days, and later there will be attempts at repair at certain time points.

(Editor: Wang Gang HF004)

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