He Xun Investment Advisor Yang Yujie: In the A-share market of divergence, understanding the main trend is key to staying calm

Today, the A-share market showed a significant divergence. Overall, there was a broad decline, but a few main sectors defied the trend and strengthened. Understanding the logic behind this market pattern is far more useful than blind anxiety. According to Yang Yujie, a Huaxun Investment Advisor, the current market clearly exhibits a high-low switching pattern. The overall decline is more prominent in large-cap stocks, with fewer gains. Previously, capital flowed into certain sectors, which collectively adjusted and pulled back, while cyclical-related sectors performed countertrend. We observe that sectors like coal, chemicals, oil, and electricity are performing strongly, while energy storage, photovoltaics, and lithium batteries are also showing independent rallies. The capital’s risk-avoidance and low-position layout intentions are especially evident. Conversely, popular sectors like AI, computing power, chips, innovative drugs, and consumer sectors are collectively in a correction pattern. This is not just market volatility but a normal rotation of market funds between high and low valuation sectors.

In stock trading, the biggest mistake is chasing gains and selling on dips, following the crowd blindly. The market is always rotating; there are no forever-hot or forever-cold sectors. Instead of panicking and cutting losses during declines, it’s better to calmly understand the flow of funds, stick to your trading rules, and avoid being swayed by short-term fluctuations. Finally, remember that investing involves risks. Market conditions change rapidly. It’s essential to view market fluctuations rationally, avoid blindly following trends, manage your positions well, stay true to your principles, and follow probabilities. Only then can you stay steady amid market turbulence and seize your own opportunities.

(Edited by: Wang Gang HF004)

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