Hexun Investment Advisor Zhao Bingyi: The market remains relatively positive until a strong support level is broken.

On March 18, Hexun Investment Advisor Zhao Bingyi stated that at the beginning of this year, he emphasized the importance of focusing on individual stocks rather than the index. The reason is that when the index is at a high level, it is easier to decline, while individual stocks still present opportunities. For example, the software services sector can serve as a reference. Yesterday, the Shanghai Composite Index broke below the 60-day moving average, which often signals a collapse in market sentiment. For most traders with limited skills, it is wise to pause at this point. However, the pause period could be long. For instance, when the Shanghai Index broke below the 30-day moving average in early February, I recommended that those who are not actively trading should stop. Since then, those who paused have been relatively successful in the market. Does a break below the index mean no opportunities in individual stocks? Not necessarily. Today, the number of stocks closing in the green and red is roughly equal, indicating the market is not very weak. Previously, I mentioned that the software services sector can reflect the green and red status of individual stocks well. When this sector closes in the green, individual stocks usually perform well. Although the overall market was weak today, the software services sector closed in the green, suggesting there are still opportunities for successful trades in individual stocks. Briefly about the index: from the weekly chart, the Shanghai Index has strong support at 4016 points, which is the 20-week moving average. If it breaks below this level, the downside risk will increase. Additionally, the Shanghai Index shows a clear top divergence, indicating a long-term downward trend. The ChiNext Index also shows this pattern, but because of support from communication equipment and the top 100 stocks, the signals are less obvious than the Shanghai Index, though it is also at a high level. Therefore, this year, either do nothing or focus on individual stocks. If focusing on individual stocks, the software services sector is worth watching. The daily chart of this sector showed a slight break below yesterday, but the KDJ indicator on the daily chart is below zero, and all smaller cycles are also below zero. On the 30-minute and 60-minute cycles, a KDJ above 100 can be expected. Stocks in this sector or related to technology can be analyzed using the same logic.

(Author: Zhao Yanping HF094)

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