Hexun Investment Advisor Li Jingfeng: Will the market continue to fall?

Last night, international markets continued to decline, but this morning, the ChiNext Index opened lower and then rebounded, showing relative resilience. Does this indicate that A-shares have the potential to continue rising? We analyze from two perspectives: structure and strategy.

First, regarding the rhythm of the ChiNext Index, we have mentioned multiple times before that there was an expectation of a wave c upward correction on the 30-minute chart—that is, after wave a rises and wave b pulls back, a wave c rebound should follow. However, due to the realization of positive news from NVIDIA’s GTC conference and some unmet expectations, the AI hardware sector experienced a pullback, dragging down the ChiNext performance. But the pullback in AI hardware does not mean the end of the logic. The focus should shift to domestic Ascend-related AI hardware and domestic computing power directions. Yesterday’s strength in the cloud computing sector reflects market expectations for domestic computing power.

Currently, the ChiNext faces two possible scenarios: one is a direct rebound upward, but with limited space above, so overly high expectations are unwarranted; the other is a consolidation or even a retest at the current level, followed by another rally. We don’t need to get caught up in specific paths; the key is strategic response—if it moves up, reduce positions appropriately; if it moves down, look for opportunities to add (buy low).

Looking at the Shanghai Composite Index, it continues to adjust today, but structurally, the decline is not complete. Both the 30-minute and 15-minute charts show potential for bullish divergence, so the probability of a sharp decline in the short term is low. Notably, the main groups leading the decline today are small metals, gold, and lithium mining sectors, which relate to the Fed’s reduced rate cut expectations and the strengthening dollar suppressing commodity prices. The dollar’s rebound puts pressure on international pricing of copper, aluminum, and other commodities, causing continuous corrections in the non-ferrous metals sector. Structurally, the non-ferrous metals sector has formed an ABC correction, with limited downside potential afterward. This suggests that the Shanghai Composite Index may rebound after bullish divergence in the short term, at least approaching the 10-day moving average.

Finally, returning to the ChiNext, it is currently in a strong consolidation phase. After completing a large ABC correction and stabilizing, recent sideways movement indicates a sign of strength. The index is likely to challenge previous highs, but the process may not be swift; instead, it could advance through high-level oscillations. Therefore, the strategy remains clear: do not chase gains; consider reducing positions when rising; do not panic during declines; look for low-entry opportunities. Predicting tomorrow’s rise or fall is unrealistic, but understanding how to respond after movements occur is the pragmatic approach to trading.

(Edited by: Zhang Yan)

【Disclaimer】This article reflects only the author’s personal views and has no relation to Hexun.com. Hexun.com remains neutral regarding the statements and opinions expressed in this article and does not guarantee the accuracy, reliability, or completeness of the content. Readers should use it as a reference and bear all responsibilities themselves. Email: news_center@staff.hexun.com