Hexun Investment Advisor Yang Lihua: Another day of declining volume. What’s next for the market?

After the holiday, the first day is still a strong start. This time, we’re talking about the right thing. At this point, the market is gradually working out the second “foot” retracement to be over. That’s a likely event, but many friends don’t seem to agree when looking at the order book—look at the volume; you can tell that the trading volume has shrunk again. That means many friends lack confidence in the overall market at the moment.

Yang Lihua, an analyst for Hexun Investment Advisory, analyzes that on the one hand, we see that the external situation—namely the U.S.-Iran part—is also gradually beginning to move closer to a phase of contraction, meaning that the worst period may have already passed step by step. On the other hand, we also notice that the number of individual stocks going up across the entire market has started to rise. In other words, we’re now seeing an attitude of “individual stocks keep growing without the index rising.” And pay attention: even as volume contracts, stocks can still rise—this shows that selling pressure is quite light. What’s missing is incremental funds entering. So when will the funds come in? When will that second “foot” be firmly established? Everyone should note there’s a logic here: it’s not that the broader market looks good first and then individual stocks rise. Instead, leading sectors rise first, and only then can the broader market improve.

Another more positive signal today is that the micro-cap stock index rose by quite a bit, reaching 3%. It was almost a reversal into a rebound. Look at the Shanghai Composite Index—it didn’t rise much, and other broad-based index benchmarks also didn’t rise by much. That indicates that funds didn’t lift the big-cap stocks. The market generates the trend amid doubt. On one side, people continue to notice the trend of “the strong stay strong,” with the direction near the Q1 earnings season—such as optical communication, this CPO direction—still performing strongly. Another point is: what influenced this small paper—this chemical, this chemical raw materials, has seen a strong rebound. No matter how you put it, the market is gradually warming up; local stocks stabilize first, then continue to drive the overall upward trend. That should be the main way of thinking.

Of course, whether the broad market shakes or not—either way—it’s only to complete this structure. Individual stocks are stabilizing one after another, mainly with rebounds. So at this time, friends should strengthen confidence and keep in step with the rhythm.

（责任编辑：Wang Gang HF004）

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