Hexun Investment Advisor Wu Zhipeng: Has 4050 Bottomed Out?

Today, the Shanghai Composite Index again formed a single-pin bottom, leading many to wonder if the big move is finally here. After three attempts to bottom out, is 4050 the final level?

Huxun Investment Advisor Wu Zhipeng said no. Why? Because today, the Shanghai Composite and the ChiNext Index have already diverged. This divergence isn’t just happening today; the false three-pin bottom on the Shanghai Composite indicates that the recent decline is mainly due to earlier energy sector movements, such as steel, precious metals, non-ferrous metals, as well as construction and electricity. These sectors experienced a broad decline today because they were previously affected by external factors, including rising energy prices, which caused a delayed surge and subsequent correction. The decline is primarily responsible for pushing the index down.

But why did the index recover today? It’s because of the afternoon rally in tech stocks. We also mentioned GTC—this morning, energy stocks led the decline, but in the afternoon, tech stocks supported the market and pushed prices higher. Under this context, you’ll notice that tech stocks and the STAR Market 50 are in the green, while the Shanghai Composite remains weaker. This kind of divergence indicates that we should focus on the ChiNext Index rather than the Shanghai Composite.

What kind of market will we face next for the ChiNext? Today’s view is that this position is a false positive candlestick, and the upcoming trend could be a trap for more gains. If the index attempts to push higher again, especially in the tech sector, investors should consider reducing positions and taking profits. Please pay close attention to this.

(Chief Editor: Shao Xiaohui)

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