Hexun Investment Advisor Gao Luming: Will it rise again tomorrow? Should we increase our holdings?

Yesterday, we emphasized that the market was bottoming out and expected a rebound soon. Today, we saw the three major indices rebound as expected, but trading volume significantly decreased. Will the market rebound again tomorrow? Should we increase our positions now? Gao Lu Ming, a Huaxun investment advisor, believes that the current rebound has not ended yet, and the market can still rise tomorrow.

First, after yesterday’s bottoming out and rebound, the market showed strong support, and today’s rebound was quite solid. Although the Shanghai Composite Index only posted a small positive daily gain, the Shenzhen Component Index and the ChiNext Index rebounded more strongly, with gains of over 2% and 3%, respectively. This indicates that the buying momentum is very strong, which helps push the market higher.

Second, during yesterday’s bottoming and rebound process, market funds entered heavily, with trading volume exceeding 300 billion yuan. Since the volume was so high, today’s small rebound cannot trigger the main funds to sell off, which also supports the possibility of continued rebound tomorrow.

Third, before the holiday, the market was following a standard upward trendline. Currently, the market remains above this trendline, indicating that the short-term upward trend has not been completely broken. Today’s market closed above the 5-day, 20-day, and 30-day moving averages, with only the 10-day moving average acting as resistance. Multiple moving averages below provide support, further aiding the index’s continued rebound.

In summary, I believe the rebound has not ended yet. Moreover, today’s market saw both large-cap sectors and hot spots gaining strength, so there’s still a chance for the market to rise further tomorrow.

So, what should we do in this situation? On one hand, although the market rebounded today, trading volume did not significantly increase. For those with lighter positions in stocks that haven’t shown a clear upward trend at low levels, it may be appropriate to look for some rebound opportunities in sideways or consolidating stocks that haven’t yet moved higher. For those already holding substantial positions, it’s advisable not to add more now. Patience is key—wait until the rebound ends or stocks show clear signs of peaking before considering taking profits.

Of course, I want to emphasize that sector rotation remains quite rapid, and the overall sector continuity is relatively weak. If stocks deviate significantly from the 5-day moving average, or show volume-driven surges or large downward gaps after rising, it’s wise to take profits quickly. Recently, sectors like power and related industries that experienced sharp rises, once they break below the 5-day moving average, indicate short-term resistance and increased risk of a pullback. Be cautious of potential corrections and pressure in these areas.