Hexun Investment Advisor Li Faliang: Tuesday Market Forecast — Testing the Bottom and Recovering!

The market index dropped by 150 points today, briefly breaking below 3,800 points during the session. Since early March, the index has fallen less than 10%, but there are many stocks with declines of over 30% to 50% or more. Over 3,000 stocks declined more than 5% today, with more than 200 dropping over 9%, approaching the limit down. Today’s level of panic is likely the worst in the past six months.

The power sector, which surged in the morning, also hit the limit down in the afternoon. Currently, aside from repeatedly buying low and selling high within the power sector, most investors participating in other themes are likely experiencing significant losses and struggling to find direction. The key resistance level tomorrow is at half of today’s large bearish candle. If the 30-minute K-line fails to break above this level, the market remains bearish; if it breaks above, it indicates a bullish trend. All sectors are down today. Previously, banks, brokerages, and insurance firms attempted to support the market, but today even those efforts failed, marking a complete defeat.

As long as it’s not a sector we emphasize, investors with heavy positions—especially those holding precious metals since early March—are generally experiencing declines exceeding 40%, with related indices falling from 8,000 to 5,000 points. The stocks we bought at low prices today hope to rebound in the next day or two. We will continue to repeatedly buy low and sell high in the power sector, but we will never hold stocks without action. Power stocks can fluctuate by as much as 15 points; if you don’t sell at the high, it will be hard to avoid losses at the low. In the same direction or even the same stock, poor timing can lead to big profits for some and big losses for others—that’s normal.

My personal view is that tomorrow’s market will at worst experience a bottoming out and a recovery.