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The negative sentiment caused by the weakness in the US stock market is still fermenting. Coupled with the bearish news from the mainland stock connect last night, the three major indices collectively plummeted at the opening today. The Shanghai Composite Index opened at 4106 points, having touched around 4103 points yesterday. If the market continues to decline and breaks through this level during trading, a rapid rebound to 4122 points is necessary in the short term—otherwise, breaking below 4100 points could lead to deeper adjustment risks.
From a technical perspective, the area around 4122 points and the five-day moving average has become the main resistance for upward movement. Whether this level can be successfully reclaimed will determine the subsequent trend. Once the 4122-point line is regained, although there may be some oscillation around the five-day moving average, there is hope to continue pushing towards the 4141-4150 point range. The key still depends on whether market sentiment can stabilize and how well traders can manage the game between these critical levels.