Investment Advisor's Market View: Strong Recovery and Counter-Attack to 3900 Imminent, Exit or Bottom-Fish?

On March 24th, Liu Changsong from Hexun Investment Advisory stated in today’s market analysis that A-shares experienced a large-volume rebound, marking a retaliatory rally with hundreds of stocks hitting the daily limit, and over 5,130 stocks rising. The 3,794-point level will become a phase-specific relative low, which is also this year’s relative low. He believes that there is no pressure below 3,900 points for this rebound. Today’s close was at 3,881 points, with the Shanghai Composite Index rising 1.78% in a single day. From both time and space perspectives, the rebound will inevitably return above 3,900 points.

Additionally, regarding trading volume, Liu Changsong said that those who needed to cut losses did so yesterday, so a decrease in volume today is very normal. If the rebound were to increase volume, it could lead to divergence and volatility. There is no pressure below 3,900 points, but there will be resistance above gaps. The next step is to test resistance at the top, and after digesting that pressure, it is possible to look toward 4,000, 4,100, and 4,200 points. But since the pressure has not yet been digested, for now, the focus is on an oversold rebound.

Specifically, from the market structure, Liu Changsong pointed out that the recent correction of the Shanghai Composite Index is a standard head-and-shoulders neckline with a 1:1 equal length. The range of this box is 400 index points, with 200 points above and 200 points below. In the short term, the Shanghai Composite will digest the trapped positions above the 200-point lower boundary. From a structural trend perspective, the monthly chart shows no problem with the upward movement. The monthly chart features a very large box, which has not historically seen A-shares turn downward immediately after breaking out of the box. Therefore, 4,200 points is definitely not the top of the A-share market, and the overall structure remains stable and positive.

Regarding specific indices, the Shenzhen Component Index shows a similar pattern to the Shanghai Composite, both attempting to test the 5-day moving average with a rebound. The only difference today is the ChiNext 50 Index, which currently resembles its trend after the National Day last October, showing typical signs of a three-wave decline and bottoming out. It may be the first index to rebound—of course, before the daily MACD and KDJ indicators show effective double gold signals, the market can only be judged as an oversold rebound for now.

In summary, Liu Changsong believes that today’s market recovery is very good. If tomorrow continues to advance and successfully breaks above the 5-day moving average, forming an oversold rebound pattern, funds that cut losses yesterday may re-enter. The market may then experience further volatility, but after the volatility, panic selling could continue, allowing the market to truly digest the pressure above the box. This will pave the way for a genuine main trend to emerge. Until then, investors can participate in short-term rebounds cautiously, but those lacking confidence in their trading skills are advised to stay on the sidelines for the short term.

(Edited by: Zhang Yan)

【Disclaimer】This article only reflects the author’s personal views and has no relation to Hexun. Hexun’s website remains neutral regarding the statements and opinions expressed in this article and does not provide any explicit or implicit guarantees regarding the accuracy, reliability, or completeness of the content. Readers should use this for reference only and bear all responsibilities themselves. Email: news_center@staff.hexun.com