Hexun Investment Advisor Li Peng: A-shares Rally and Pull Back, Follow-up Market Response Plan

On Tuesday morning, the market surged sharply then pulled back, while the ChiNext Index opened high and then declined. Facing this trend, friends may start feeling frustrated again. Don’t worry, I’ll explain the reasons and strategies in one minute.

First, the reasons. Early this morning, the “Spring Gala” for tech stocks—the GTC Conference—was held. For the tech sector, this is a state of exhausted positive news. We all know that when good news runs out, it often turns into bad news. On the other hand, the central bank’s 500 billion yuan liquidity injection earlier this week directly benefited the financial sector. This morning, financial stocks surged significantly, draining funds from other sectors. At this point, we need to distinguish between the three main drivers of the financial sector: the banking sector has already rebounded for six consecutive days and is not suitable for chasing; meanwhile, the securities sector shows a small double-bottom pattern after being oversold, with a higher probability of continued upward movement.

In a market lacking hot topics, what can retail investors focus on? I offer a different perspective: whenever there are no hot spots to trade, it’s often the breakout time for the second- and third-tier new stocks. The advantages of the second- and third-tier new stock sector include: first, new stocks do not face issues like explosive earnings or major shareholder reductions; second, most of these stocks are strong institutional stocks with clear and smooth chart patterns, making it easier for retail investors to judge; third, after listing, these stocks often experience a sharp pullback, entering an oversold state, which can easily trigger a rebound. Every month, the second- and third-tier new stock sector experiences a wave of gains, with some stocks performing strongly.

（Editor: Zhang Yan）

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