Hexun Investment Advisor He Bing: When trading volume hits a bottom and prices reach a floor, should we give up or sell off?

Yesterday, I told everyone that this place needs to lower expectations, meaning there are no real expectations. Although a lower shadow was left, hidden risks still exist. Where are the risks? I mentioned yesterday—gaps must be filled.

As for the reason for the market decline, it’s simply that whenever optical communications plunge, big tech stocks also fall; when big tech stocks fall, the market can’t do much better. Although today the Shanghai Composite Index rose above 4,100 points led by insurance, real estate, banking, and securities sectors, touching the 5-day moving average, but what’s the use? Can it lift the overall market? It can’t.

The issue remains today: after a single bearish candle, the trend has broken. Last week, I told everyone to watch out for a double top in optical communications. Now that it’s developing like this, is it a double top? If the price drops below this level again, confirming the end of the tech bull market, does the market still have hope? At this point, there’s not much to say—it’s still about whether optical communications can stabilize. But since optical communications has fallen so much, if this sector isn’t finished, there’s a possibility that in the next day or two, optical communications will present a mid-term opportunity for position building, a chance to reverse and catch the rebound.

When following a trend, you must accumulate positions at the end of the session during sector declines, actively buying on dips. The premise is that the trend isn’t over; if it ends, it’s game over. Like commercial aerospace—once it ends, you’re just laying in wait, and there’s a bottomless pit beneath. Optical communications can’t end, nor can it volume up. No matter what, optical communications is among the best performers in terms of fundamentals. If it can’t hold, honestly, who else can? If you don’t want to exit the stock market, you can only hold onto the last hope—hope the trend persists, hope it’s a reversal to catch the rebound.

The key question is: when optical communications stabilizes, the market will stabilize too. With securities, banks, insurance, and liquor sectors, the market won’t fall much. The real core is the average stock price. After yesterday’s lower shadow and today’s rebound, it’s tricky. The focus now remains on optical communications and whether it can stabilize.

This afternoon is also quite important. If funds start accumulating optical communications early, that would be perfect; I just worry no one will buy the dip. If someone does buy the dip, it indicates resistance, and resistance means hope.

As for other sectors, the chemical sector shows the best pattern—it’s the strongest among all. But yesterday there was divergence, which might continue. Yesterday’s probability was about 55%. This morning, the market surged briefly at open, then quickly turned downward, with two days of divergence, and the 5-day moving average was broken, indicating a trend break. The green energy sector is similar; I mentioned yesterday that it has been diverging for two days, and today needs a correction. Has it been corrected? Yes. After correction, since the trend was broken—yesterday’s 5-day moving average was broken—after correction, it continued downward. So, all sectors only show rebounds, not reversals. The last hope remains in optical communications and storage; if they can stabilize, everyone will have confidence to go long. If they can’t stabilize, the market will drift downward slowly.

(Edited by: Zhang Yan)

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