Hexun Investment Advisor Wang Haiyang: The A-share mid-day decline breaks below 3,900 again. Has the rebound ended? What is the outlook for the future?

The market indeed broke below 3,900 points again today. Will the index continue to rebound? According to Wang Haiyang, a Huoxun investment advisor, we’ve been warning recently that this area has seen two consecutive days of gains, mainly due to a short-term oversold rebound after significant declines. Ultimately, the index needs to be confirmed again. Today’s pullback was expected, but there’s a positive sign: trading volume was much lower, indicating that after this rebound, a retest could lead to a volume dry-up, which may signal a potential bottom.

Today’s market formed a bearish candle after two days of rebound. Will it continue to fall or rebound again tomorrow? If it rebounds again, it will release some of its upward momentum before possibly falling further. Looking specifically at the index, we see this as an oversold rebound that could change direction at any time. After opening lower and rebounding for two days, the index faced resistance and opened lower again in the afternoon, with volume shrinking significantly—this is a sign of a rising market without strong volume support. The index then dipped again, filling the gap, and tomorrow might see a small rebound or sideways consolidation before another decline.

If the index pulls back sharply, the short cycle might be too brief to hold, and 3,800 points could be challenged. These levels may see some tug-of-war tomorrow. However, we also note that the market hasn’t fully stabilized yet, especially the ChiNext board, which is showing a decisive downward correction. The probability of further declines on the ChiNext is high, so from an index perspective, the adjustment isn’t over yet. There may be some divergence between the ChiNext and the Shanghai Composite. Therefore, the recent upward movements in the market are not strong enough for concentrated trading opportunities; they are uncertain and fluctuate. After a retest and correction, the market can only be considered truly stabilized once it confirms a bottom, especially on the ChiNext, which likely needs to break below the lower shadow of the candle before a new large-scale rally can begin. Currently, it remains a bottoming process.

Investors should consider that speculative activity in these areas is risky. Once the rebound momentum of individual stocks weakens, caution is needed to avoid turning short-term gains into long-term risks. In the short term, I believe the market can rebound slightly tomorrow, with some upside potential. However, after this rebound, the market will likely face another downward pressure. Only if the 3,800 level holds and gaps are filled, along with low trading volume, can the market regain strength.

Since I first suggested the start of a bull market in September, I have been warning that the market hasn’t fully corrected yet and that a break below 4,050 was likely, waiting for signs of bottoming, reversal, and accumulation by major players before considering a long position. The market proved that once it broke below 4,050, risks were released. The index has risen for over two years, so it also needs to release some risk. Many stocks have already gained significant increases. To achieve a slow bull market, the market needs to rise and fall in waves, extending the upward cycle.

(Edited by: Wang Gang HF004)

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