Hexun Investment Advisor Gao Luming: Can It Continue to Rise? Should We Add Positions?

There are 100 stocks hitting the daily limit, and the three major indices are collectively advancing. The market has finally rebounded. In yesterday’s market review, we specifically mentioned that a rebound was imminent, and today’s three major indices did not disappoint, as expected, rebounding as forecasted. So, can the market continue to rise next? Should we increase our positions and enter the market now? According to Gao Luming, a Wenxun investment advisor, today’s market rebound is mainly due to the noticeable easing of the external situation we discussed in our early analysis, which is starting to cool down. That’s why the three major indices rebounded.

For the indices to continue rebounding, the first point is that the external situation must not escalate or worsen again. If the external environment continues to deteriorate, it will negatively impact the global markets and also have adverse effects on China’s A-shares, potentially causing the rebound to fail and turn into a new bottom. Therefore, the external situation is one of the key factors influencing the global markets. We will continue to monitor news developments tonight.

The second point is that for the market to sustain its rebound, the technology sector must continue to demonstrate profit-making effects. In our early analysis today, we emphasized that the technology sector’s leadership in generating profits is crucial for further upward movement. This afternoon, the technology sector launched a rally, which helped the indices shift from a small oscillation to a strong rally. Thus, driving the market’s profit-making effect through the technology sector remains a key focus.

The third point is that major heavyweight sectors should exert strength, accompanied by increased trading volume. Today, some traditional sectors such as non-ferrous metals, steel, and large financials started to gain momentum. However, the downside is that the trading volume in the Shanghai and Shenzhen markets significantly shrank, decreasing by over 340 billion yuan. This indicates that external funds are still on the sidelines, hesitant and observing. During the initial rebound, this hesitation is understandable and suggests there is still some opportunity in the market’s current position. But if tomorrow these external funds remain unwilling to enter, and major internal sectors also fail to show strength, the market will struggle to sustain the rebound and may even reverse to a decline.

Therefore, tomorrow’s market volume should ideally exceed 150 billion to 200 billion yuan to support a weekly-level rebound, which would be an opportunity for us to increase positions again. During today’s live trading session, I clearly emphasized that the market opened sharply higher by 36 points. I advised against chasing the rally. Subsequently, the index experienced continuous oscillations and a slight decline, even turning green at one point. When the market first broke through the downward pressure line, only about 8 points higher, I pointed out that this was a testing point, but positions should not be too heavy.

Later, the market moved into a series of oscillations and rebounds, and in the late session, we highlighted that those with light or no positions could consider short-term attempts at a rebound. However, I stress that since overall trading volume remains low, indicating that large funds have not yet shown clear commitment, it’s not advisable to hold heavy positions now. If you already have positions, it’s better to wait. If tomorrow’s volume increases, we can add some positions. If not, we should look for opportunities to sell high during the short-term rebound.

For those holding full positions, we have emphasized many times that if you did not reduce your holdings on March 3 and March 13 as we advised, your losses might be deeper now. In this situation, don’t panic. If the rebound does not reach the market’s final high point, avoid cutting losses prematurely. Be patient and wait for the weekly-level rebound to form before considering high-level exits. Even if there is a retest later, patience is key because the previous cut points are no longer valid. The main strategy now is to wait patiently.

(Author: Wang Gang HF004)

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