Hexun Investment Advisor Zhong Kaifeng: Will the Market Alternate Between Highs and Lows? How Should Retail Investors Respond?

Banking, insurance, securities, and other financial sectors surged significantly today, while the technology sector showed signs of capital outflow, indicating a clear rotation between high and low sectors. Sectors that have been underperforming for a long time performed well, including not only the financial sector but also consumer sectors like Baijiu, hotels and catering, as well as real estate. This phenomenon reflects a certain risk-averse sentiment among current funds. Over the past year and the first three months of this year, the technology sector has accumulated substantial gains, and some investors lack confidence in its ability to continue expanding, leading to rotation between high and low.

However, it is not appropriate to overly bearish on tech stocks. From an earnings perspective, core technology areas such as storage and optical modules remain the fastest-growing sectors across all industries. The development trend of artificial intelligence has not ended; Nvidia recently significantly raised its 2027 chip sales forecast to trillions of dollars, indicating that demand for chips, data centers, and computing power will continue to grow. Therefore, the upward trend of the domestic tech industry is unlikely to change easily. Earlier, sectors like optical communications experienced a correction due to large gains, and high-position growth sectors like power grid equipment also adjusted simultaneously, which is a phase of consolidation rather than a fundamental reversal.

Regarding investment strategies for tech stocks, patience is recommended. It is not advisable to rush into bottom-fishing today; instead, observe whether the stocks can stabilize around the 30-day moving average in the next two or three trading days. Tech sectors with strong growth potential are likely to find support around the 30-day moving average during a correction, unlike weak sectors lacking fundamental support, which may retrace to the 60-day moving average. For financial, consumer, and real estate sectors that started from lower positions, whether to participate depends on the investor’s risk appetite. For those seeking stability and with low expectations for yield flexibility, it is appropriate to focus on sectors like securities and insurance that have started today. The real estate sector benefits from policy support and recent sales data recovery, making it a potential allocation option. More promising growth directions include new energy fields such as wind power, photovoltaics, and energy storage. Regardless of how the Middle East situation evolves, the global energy transition acceleration has been established, and overseas orders will continue to flow into China. The previously worried overcapacity issue has been gradually alleviated with export data support. The new energy sector combines growth potential with earnings certainty and is worth close attention.

Overall, investment should be based on risk management awareness, with a focus on portfolio allocation. It is not advisable to concentrate heavily on a single sector; instead, diversify across two or three sectors with solid fundamentals to cope with short-term fluctuations. The medium-term trend of A-shares remains positive, but specific investment strategies should be gradually optimized according to individual risk preferences and market rhythm.

(Author: Zhang Yan)

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