Hexun Investment Advisor Li Jingfeng: You must analyze by technical methods and observe which groups are leading the rally during uptrends

On March 26, Hexun Investment Advisor Li Jingfeng stated that last night, the U.S. stock market rebounded, with the Nasdaq Golden Dragon Index rising 1.86%, but today the A-shares experienced a pullback. Behind this, from the Middle East situation, there are signs of easing from the previous tension, but the situation is not over, causing market concerns that the rebound will not be immediate and will form an ABCD wave pattern.

Looking at the Shanghai Composite Index, it rebounded near the 5-day moving average. I mentioned in a recent live broadcast that this level would face resistance, leading to a pullback. Only after strengthening can it attempt to reach the gap and the 10-day moving average. This is a wave structure where the rebound relies on the 5-day moving average, and after a pullback, the rebound depends on the 10-day moving average and resistance levels. During the previous rally, there was clear resistance around 3,950 points, which is the first resistance level for the Shanghai Index. When reaching this level, moving averages and dense trading zones will exert pressure, causing another pullback. My main strategy framework is that if the market continues to rise and experiences a brief pullback with strength, I may look for opportunities to reduce positions. Later, during the pullback, I will look for opportunities to add positions. There are still two trading days left this week—Thursday and Friday—and I may not increase positions significantly but wait for a pullback, as the market is likely to fluctuate again.

Regarding the ChiNext Index, it was expected to pull back today but instead strengthened, mainly driven by the lithium battery sector, led by Ningde Times. The reason is that overseas data centers may shift from lead-acid batteries for energy storage to lithium batteries, causing the lithium battery industry chain in A-shares to rise. However, you will notice that while lithium batteries are strengthening, the photovoltaic sector is pulling back, indicating that today’s strength in ChiNext is a false signal. The so-called hot spots depend on the overall trend. Today, lithium batteries led ChiNext higher, but it’s difficult to sustain, as AI hardware and photovoltaics are all pulling back. Such rises are likely to fall back after a rally. It’s not that ChiNext cannot rise; strategically, it’s not good to increase positions during an upward move. Instead, focus on strategy rather than making definite predictions. Even if there is some rebound, the space is limited, and adding positions at this level is not worth the risk-reward ratio.

Many retail investors see the market rising and immediately want to buy, but don’t do that. You must analyze with techniques—see who is leading the rally and why. For example, this morning’s lithium battery rise was due to a small logic shift related to overseas data center energy storage transitioning to lithium batteries. Such rises may not have lasting sustainability, so don’t chase them. Overall, I probably won’t add positions easily in the short term. If the market continues to rise, I might even reduce positions, including in the Shanghai Composite Index. However, if there is another pullback later, I will still choose to add positions—that’s the current big background.

(Edited by: Cui Chen HX015)

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