Hexun Investment Advisor Xiong Wei: Has it pulled back again? Can commercial spaceflight become a main theme?

Today is another very quiet day. Why did the US stocks rise while ours fell? When US stocks clearly declined the day before yesterday, why did ours rise? What is the reason? According to Hu Wei, a market analyst at Hexun, this indicates that the entire Asia-Pacific market and the global market are now showing disorganized behavior. From the overall market perspective, it’s not a connected relationship but rather a parallel one. So many funds are hesitant to increase their positions today, likely wanting to rest and observe. We also mentioned that there’s a high probability of the index pulling back because, since the last rebound in October, a retracement low point is likely. When the market moved up today without volume in the early trading, I told everyone to prepare for a reversal and to act accordingly. Many students asked if the “Human Shape Robot” sold off after the reversal this morning. Will it really sell off? Check the volume—if there’s volume and support, it’s different from no volume, which is just playing tricks. Always remember that.

Looking at the market today, the first sector to surge was the lithium battery sector. Today, this sector is at a very important resistance level. I mentioned yesterday that lithium batteries must defend the 20-day moving average. Today, the lithium battery sector rebounded from a low point because the power sector declined. When the power sector fell in the morning, funds flowed back into lithium batteries to gamble. During the previous oil market oscillation cycle, lithium batteries were the only sector that didn’t experience forced declines, including battery chemicals and lithium mining. These sectors are slightly linked now, but the connection isn’t strong. So, when the market surged and then fell back today, lithium batteries could consider a reverse T+1 trade or partial profit-taking.

Tomorrow, if you see funds rushing into lithium battery rebounds, they will likely seek other tech sectors. So, lithium batteries should be viewed as forming a high-level consolidation within a range, rather than trying to accumulate more chips during the oscillation. The second sector is the power sector, which is the only one that has hit new highs among all sectors. Can it continue to be strong at this level? First, look at the power sector. The stock that hit nine consecutive limit-ups today was halted, which means the market’s momentum has waned. Why? Because the power sector also experienced a decline due to low volume. In the afternoon, a sector sold off, which I will mention shortly. When that happened, funds shifted out. Many investors see the power sector as high at this point, so when the divergence turned into consensus today, I advised taking profits at the high. Some also asked if they could buy the dip in the power sector. During this high-level consolidation, you need the sector to develop an independent trend before adding positions. Don’t worry—look at the example of the commercial aerospace sector, which took a month to develop an independent trend. The power sector has only been rising in a second wave for a week, so there’s no need to panic. Once it establishes a trend, you can naturally add.

Tomorrow, the power sector will be a key focus area. Its decline could lead to further drops in wind power equipment and grid equipment. I want to mention that wind power and grid equipment are currently below the Bollinger middle band and above the 60-day moving average. If they fall further and break below the 60-day moving average, they will need to reduce positions. This is an important turning point. Today, during the rise, the power sector was decoupled from wind and grid equipment, but during the decline, they tend to fall together, which can cause significant damage. So, tomorrow, watch whether wind power and grid equipment, including ultra-high-voltage lines, can strengthen. Another sector to watch is commercial aerospace. Today, the power sector’s rise was partly driven by capital flowing back into this sector. Could commercial aerospace become a main theme? It’s too early to tell. It just rebounded from a low point, and there are still many resistance levels above. Only about six stocks have risen more than 10%, and historically, during market corrections, collective rebounds of fewer than ten stocks don’t qualify as a main theme. Tomorrow morning, if the market opens lower, what should you do? If it continues to decline with increased volume, there are opportunities to buy the dip. The strong rebound on the day before the market turns is very important. That’s why I advised some to take a short position and others to go long today. You should reserve some capital for tomorrow’s action. If the market opens with low volume and continues downward, don’t worry—keep less than 70% invested. If the index drops back to the low of 3794 points during this correction, can we make a strong rebound? Only if the volume exceeds 2.5 trillion can we consider it meaningful; otherwise, it’s all for nothing.