Hexun Investment Advisor Wen Taibin: A Good Start in April—Are the Opportunities Big or the Risks Big?

Yesterday, the A-share market fell sharply, so why could it rise strongly today? According to Hexun Investment Advisory’s Wen Taibin, there’s only one core reason: the positive news from the easing of regional conflict has stacked with the surge in Western and U.S. stock markets, and the A-shares have ushered in a “good start to April.” So, is the “good start to April” an opportunity or a risk?

Old Wen still believes it’s more risk than opportunity, and gives three reasons, then shares a potential risk point for April. First, for the positive news: although the A-share market is up, trading volume is only 2 trillion, which is not enough compared with the 5-day average volume—so big capital still doesn’t recognize it and will not support a sustained rally. Second, at present, Old Wen still thinks this is an adjustment phase of Wave 4; and in terms of the pattern, it has broken below the neckline of the “M head.” The pressure zone is around 3950~4000 points. The gap has already been filled today, and the more it rises, the more pressure it faces. Third, from the sector perspective: today’s focus is on low-position areas like innovative medicine and “high-performance” CPU-related computing-power directions. Other sectors basically don’t show any big upward momentum, and there’s no clear mainstream direction.

Overall, it’s still more risk than opportunity. More importantly, in April there is a potential risk point: April is the period for earnings disclosures. For pseudo-growth stocks and stocks with poor performance, you need to prevent blow-ups. The strategy is defense—trim positions on strength; those with lighter exposure can look for relatively lower-priced stocks with better earnings quality and trade them short-term.

(Editor: Shao Xiaohui)

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