Hexun Investment Advisor Li Cong: March trading is difficult, and the institutional side has a slightly higher tolerance for errors on sentiment-driven themes.

On March 20th, Hexun Investment Advisor Li Cong stated that the Shanghai Composite Index “shamelessly” filled the gap in the afternoon, but without volume, so there is no need to panic. The ChiNext Index opened high, quickly shrank in volume to the top of the box in the morning. The last time on January 14th, when the high point was reached, the ChiNext’s trading volume was 1.1 trillion yuan; now it is only over 600 billion yuan, making a breakthrough difficult. The rise and fall in the afternoon is the expected trend. The midday review especially reminds that institutional stocks in sectors like technology, Dalian Chain, and new energy should not be chased, as their primary weights pushed the ChiNext to the top of the box in the morning. Today’s data is even “colder” than yesterday, with more limit-down stocks than yesterday. In terms of operation, it is still necessary to take some early positions. Recently, there has been a rotation among themes such as Dalian Chain, storage, and new energy institutional lines. During the day, there was a climax in new energy, a climax in Dalian Chain, but divergence occurred with insufficient time for divergence, which can be seen as the current institutional grouping around leading stocks. When the index falls, these stocks remain resilient. Storage has been divided into two days, replacing decline with sideways movement, resisting the large drop in the index, and there was a rush for storage stocks at the end of the session. Regarding sentiment themes, quantitative trading is not advisable. Domestic computing power faces negative news but is violently hedged, leaving only the dual themes of electric computing collaboration, such as GCL-Poly and Yunnan Energy, which is reasonable. After all, when the index performs poorly, funds tend to group around leaders. Overall, March is challenging for trading. Institutional themes have a slightly higher tolerance for sentiment themes, but only for core stocks—institutional players group around leading institutional stocks, sentiment traders group around sentiment leaders. Other non-core stocks are more likely to be abandoned, and market tolerance is low.

(Edited by: Zhao Yanping HF094)

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