Hexun Information Wang Haiyang: Will the market directly take off from here, or will there be fluctuations in the future?

On April 8, Wang Haiyang of Hexun Information said that a sudden major positive development drove A-shares to break out with a “super bullish” long white candle. He has been emphasizing that the index rebound has not ended yet. In the past two days, the market has seen volume shrinkage; today, however, the broader market opened sharply higher and surged up by 100 points directly. This is a further release of the rebound momentum from the earlier period. This big rebound was mainly stimulated by positive news from overseas and is a retaliatory-style rebound.

So, what impact will this big rebound have on the outlook? Will the market take off immediately from here, or will there be ups and downs later? And how should investors formulate response strategies? Looking at the index situation in detail: in recent days, trading volume for the broader market has been extremely small. Shrinking volume often signals that a rebound is underway. With stronger rebound strength under the stimulus of good news, the rebound’s strength is stronger this time. Previously, it was judged that the rebound momentum of this round has not yet been exhausted. Even if there may still be a pullback after the rebound, many sectors have not yet rebounded. Today’s higher opening and repair reflect that yesterday’s low-volume star line was choppy and fluctuating, and it accumulated strength for today’s big rally on good news—discharging the rebound momentum.

Today, the Shanghai Composite Index surged by 100 points and closed with a “single-head” bullish candle. The Shenzhen Component Index did the same. The Beijing Securities Index, the ChiNext board, and the STAR Market (Science and Technology Innovation Board) also rose sharply, with the STAR Market showing the most obvious volume shrinkage—up more than 6%—while the ChiNext board rose by more than 5%. However, this gap-up left a relatively large gap, which may plant hidden risks for the market’s future trend.

In the short term, it’s important to watch whether the rebound can continue. If today’s single-head bullish candle is to keep the rebound going, it’s best if it can again rise with another gap. If it does not gap up and tomorrow’s performance is weak, once the rebound momentum runs out, it may pull back to fill the gap; only after a right-side bottom is formed can it start again. The market saw a slight increase in volume today, and trading value returned to above 1 trillion, but the increase in trading volume was not large. This indicates that the rally this time is mainly a continuation of rebound momentum driven by positive news.

For oversold stocks, many of the stocks in this round are deeply oversold, and they have the opportunity to turn around directly—possibly having already completed the oversold digestion and adjustment here. Therefore, long-term investors who are trapped in oversold stocks should not take action lightly; oversold stocks can basically be considered for holding. But from the perspective of the index being steady and most stocks, under a backdrop of the market pressing back, it is more prudent to wait for the pressing-back to play out. The profits from this rebound are mostly short-term profits, so you need to monitor market changes at all times. Especially if tomorrow cannot be stronger: because this rebound is only driven by positive news, unless tomorrow pulls out an even bigger bullish candle, the timing and rhythm of short-term pullbacks will become apparent. It is expected that the adjustment and pullback may end by late April; only after that would A-shares have a chance to see a truly big trend.

(Responsible editor: Cui Chen HX015)

     【Disclaimer】This article only represents the author’s own views and is not related to Hexun. Hexun.com maintains a neutral position regarding the statements, viewpoints, and judgments in the text, and does not provide any express or implied guarantees regarding the accuracy, reliability, or completeness of the content included. Readers are requested to use it for reference only and bear all responsibility themselves. Email: news_center@staff.hexun.com

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