2025-12-25 11:21:02

The market appears to be broadly rising on declining volume, but the actual risks are significant.

This morning, after finding support at 3914 points, the main index rebounded and oscillated higher to 3921 points, then slightly retreated to 3912 points before stabilizing again. Although the momentum was upward throughout the morning, it ultimately closed with a small positive candle. But looking at the trading volume reveals the real situation—total turnover across both markets was only 465.9 billion yuan, 51.9 billion less than the same period yesterday. The pattern of fewer declines and more advances has completely reversed, with all stocks experiencing a restorative rally.

This is the core issue. Price rises while trading volume shrinks, creating a clear divergence. What does this mean? Even if the market continues to push higher in the afternoon, the room for a breakout is extremely limited. Even if it barely manages to stay above 3936 points, a true breakout will be hard to form. The main players are creating too much false enthusiasm to lure in new funds.

The key trading strategy is clear: when the market is oscillating between the 55-day moving average (3923 points) and the upper band of the Bollinger Bands (3940 points), it’s the best time to take profits. For those with unrealized gains, it’s time to decisively reduce positions in the afternoon and lock in profits.

A closer look at sector performance makes this even clearer. Gains are relatively balanced across sectors, with no particular sector standing out, and no main theme driving enthusiasm. In simple terms, this is a restorative rebound that cannot attract new capital to volume up.

Therefore, regardless of whether the market can break through 3936 points in the afternoon, don’t blindly chase the rally. Main players could reverse and short at any time. If you want to add to your positions, you need to be patient and wait. As long as the market cannot volume-break through 3936 points or hold above the upper Bollinger Band, it’s highly likely to retrace below 3890 points later, and this must be kept in constant vigilance.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

12 Likes

Reward
12
4
Repost
Share

Comment

0/400

BottomMisser

· 3h ago

Oh no, it's that kind of shrinking rebound trick again. The main force is really playing it skillfully. Trading volume shrinking while prices are still rising, I knew there was no good news. If it can't break 3936 points, be prepared for a beating. This time, I really need to cut positions. If it still pushes higher in the afternoon, I'll just laugh. This kind of trap is pretty harsh. It's just a corrective rebound, nothing new. New funds simply can't come in. I bet it will turn around in the afternoon, see 3890, definitely. This time, I won't chase. I'll wait for volume to pick up before acting.

View OriginalReply0

DiamondHands

· 5h ago

The pattern of a volume-constrained rebound is seen too often. The main players love to lure more buyers and then cut losses to trap retail investors. --- It's both a trap to lure more buyers and a reduction in positions. Just listen and don't believe it completely. There are still stocks hitting the daily limit in the afternoon. --- Can't break through 3936 points? I think this market is just putting on a show for the big players. Retail investors are watching and feeling exhausted. --- I never look at the data on the upper and lower bands of the Bollinger Bands. I only watch the trading volume. The volume is indeed too awkward. --- I dislike restorative rebounds the most. Prices rise uncomfortably and fall quickly. Wait for a real volume breakout before jumping in. --- What sounds good is just a trap to lure more buyers. In reality, it still needs to retest. This logic is sound. --- I am especially annoyed by this kind of volume-constrained rise. It feels like a collapse could happen at any time, and there's no thrill in making money.

View OriginalReply0

StableCoinKaren

· 5h ago

A volume-constrained rebound is just the main players harvesting, don't be fooled. --- When trading volume shrinks and gains are balanced, it looks comfortable but is actually a trap. --- If you can't break through 3936 points, it's definitely going back to test 3890. Friends who are long should be cautious. --- The restorative rebound is the easiest to induce a bull trap, I really don't dare to chase the rally anymore. --- Take profits when floating gains appear, don't wait for the main players to turn around and hit you with a counterattack. --- Price rises while trading volume shrinks, this divergence is too obvious, it feels like there's a trick in the afternoon. --- Without a main theme or popularity, this rebound is fake. Locking in profits is the real deal.

View OriginalReply0

PaperHandsCriminal

· 5h ago

It's the same old story, daring to call a breakout on shrinking volume rebound. I'm already tired of this main force's routine. It's about to get hammered down again, and this wave is definitely going to plunge this afternoon. No matter how nice it sounds, it's just a trap. Honestly wait for 3890 before making a move.

View OriginalReply0