Hexun Investment Advisor Liu Changsong: The technical line is oscillating and pulling back, the Shanghai Composite Index has recovered.

The index has bounced back, but has your money come back? Today, the performance of the A-shares market was not as good as yesterday. Why is that? Let’s look at the data. Yesterday’s trading volume was 2.52 trillion yuan, and today it’s 2.46 trillion yuan, indicating a decline in trading volume. This suggests that selling pressure is being absorbed, but is this absorption enough? Clearly, it’s very small. According to Liu Changsong from Hexun Investment Advisory, looking at the number of stocks rising, how many are falling today? Market sentiment has hit a freezing point, with only 1,494 stocks rising today, compared to 2,060 yesterday. The Shanghai Composite Index closed down 0.1% today, whereas yesterday it rose 0.25%. The Shenzhen Component Index rose 0.78% yesterday but fell 0.63% today, and the ChiNext Index dropped over 1%.

From the perspective of the average stock price index, today it fell 1.1%, while yesterday’s decline was only 0.34%. If the market dips again in the next two days, many retail investors might cut their losses. If the market dips further at this level, it will approach support levels. Near support levels, technical rebound and consolidation are expected. Where are these support levels? We can look at moving averages or 30-minute level indicators for recovery. Once these indicators align and the decline stops, a rebound structure with oscillation is likely, continuing the rebound.

Today’s oscillation and pullback are typical of technical corrections, but this kind of market environment is not friendly to ordinary investors. Why? Because there are no barriers to entering the market, and if you don’t know much, such oscillations can be quite uncomfortable. Don’t ask me whether you should chase photovoltaic stocks; good luck and prosper.

Let’s be straightforward and clear: if the market dips again at this level, there’s no need to cut losses. Why? Because today, the sentiment indicator shows only 1,494 stocks rising, below 1,500, indicating a freezing point. It’s irrational to cut losses when the market is at a freezing point and continues to decline. Structurally, we see that since this afternoon, the number of advancing and declining stocks has been flat, indicating some support below, but the willingness to push higher isn’t strong. To stabilize at this level, what kind of push is needed?

Looking at the Shanghai Index, it has slightly recovered today, but the profit-taking effect hasn’t returned. The 30-minute structure suggests that tomorrow might not see a double bottom; the probability is low, and there might be another dip. If it dips again, it will approach support levels. How to view these supports? First, estimate where the moving averages for May will be next month. Then, look at the high and low points and their 1/2 retracement levels. If you’re unsure, check the 5-minute chart for a gap in price, which is between 4096 and 4098. This gap acts as support.

Is it possible for the market to form an ABC pattern, dip to support, oscillate, and then move upward? That’s a common scenario. This is the Shanghai Composite.

On the 30-minute chart, the Shanghai index has not yet formed a confirmed double bottom. How to interpret the 30-minute moving averages? On the 5-minute chart, will there be a double death tomorrow? If so, it’s similar to what I just described. If the 5-minute chart shows strong momentum fading, then today’s correction was effective, but the profit-taking hasn’t returned, indicating that market sentiment isn’t very high.

Looking at Shenzhen, it’s performing more or less normally. From the 30-minute chart, the possibility of an ABC pattern is relatively high. Support in Shenzhen is also at the lower gap, with the lower edge serving as support.

We don’t need to analyze the indices in detail because both Shanghai and Shenzhen are in a range-bound oscillation. The main risk in such a range is hesitation—hesitation to rise, hesitation to fall, leading to a pattern of buying high and selling low.

Other indices, like the ChiNext and STAR Market 50, have similar rhythms to Shanghai and Shenzhen but differ in structure.

Looking at today’s average stock price index, it fell 1.1%. It has also dipped into a gap, with support at the 60-day and 50-day moving averages. I think if it approaches the 5-day moving average support, you should be cautious, because on the 30-minute chart, this might be repaired tomorrow, including in Shanghai and Shenzhen.

Next, consider the market breadth and sentiment indicator. As mentioned, the ratio of advancing to declining stocks has been negative for two days, and today it hit a freezing point. If it dips again tomorrow, it might be worth paying attention to. I believe that as long as the market dares to dip in the next two days, you should also dare to look for opportunities. Wishing you prosperity.