Hexun Investment Advisor Zhao Bingyi: Can Focus on Software Services Sector, Still at Low Levels

Looking back at recent market performance, the first quarter of each year has often been challenging to operate in, and this year seems to continue that trend. Currently, the Shanghai Composite Index has fallen below the 60-day moving average, which is a key technical signal. The 60-day line is an important reference for medium-term trends; once it is broken, bullish sentiment is significantly suppressed, and individual stocks tend to decline more rapidly. This is why it is repeatedly emphasized: investors lacking trading skills should prioritize exiting the market and observing after the 60-day line is broken.

From historical experience, each round of decline usually does not accelerate immediately but goes through a process of “decline—stabilization—then acceleration.” Currently, we are in the decline phase, and two key support levels should be watched: first, the 20-week moving average on the weekly chart, around 4015 points, which may trigger technical rebounds; second, the 120-day moving average of the Shanghai Composite Index, an important support for medium- to long-term trends, which is relatively stronger. If these two levels can hold, the market’s downward pace may slow; but if both break, there is a risk of accelerated decline.

In the overall weak pattern, the software services sector is worth关注. The sector’s daily chart has shown a second J-value less than 0 signal, indicating a relatively low position from a technical perspective. It’s important to note that even if the sector is generally optimistic, timing is still crucial. Today, the software services sector approached turning red during trading, but the overall market still exhibits significant loss-making effects, indicating that while the sector reflects individual stock conditions, it cannot fully represent the extent of individual stock recovery.

Regarding trading rhythm, when the 30-minute and 60-minute J-values are greater than 100, it is usually not a buying point but more of a signal to hold and observe; conversely, J-values below 0 are more ideal entry points. Therefore, even if optimistic about the software services sector, one should wait for a reasonable entry opportunity. Overall, the sector is still far from the target level, and the process will mainly involve oscillation, likely presenting a sideways consolidation pattern.

（Editor: Zhang Yan）

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