Index Direction:
Recent bearish view remains, emphasizing the Shanghai Composite breaking long-term support. The rebound pre-holiday is seen as a post-break bounce, stuck in a descending channel.
With the increased probability of the U.S. stock market topping, it may impact the recovery of A shares. The characteristic of A shares is to follow the decline, not the rise.
Alternatively, from another perspective, the global decline may accelerate the index's fall, potentially hastening the bottoming process. Spring market prospects remain.
Short-term Sentiment:
Yesterday, Asia Satellite TV hit the limit-down; we advised caution, not chasing or engaging. Today, the market sees a return to freezing point in the short term.
Each time a leader peaks, mid-cap stocks suffer. Following the emotional cycle theory, today marks a freezing point, prompting many to hit limit-down.
Asia Optoelectronics also rallied in the last moments, banking on the weekend effect of stocks likely to hit consecutive limits.
Hot Sectors:
Tourism and Winter Sports: Surged against the trend; stocks like Changbai Mountain hit the limit. Outdoor gear, e.g., Sanfu Outdoor, also surged. The tourism sector, though, with a small capacity, negligible index impact. Once the index improves, this sector may consolidate.
Supply and Marketing Cooperatives: Soared with concepts like Zhejiang Nongken and Swan Holdings hitting the limit. ST DaJi's restructuring creates new expectations for the reform of the Supply and Marketing Co-op.
Huawei: Announced HarmonyOS NEXT developer preview. Related stocks surged but labeled as oversold rebound, sustainability uncertain.
MR (Mixed Reality): Undergoing continuous adjustment due to large gains and the downturn of major U.S. tech stocks. Recent adjustments set the stage for a rebound.
New Energy: Lithium batteries, photovoltaics continue adjusting. The more they fall, the more exciting. Industry indicators, being leading indicators, precede market peaks and troughs.
Dividend Sector Focus:
Despite the index's new low, Agricultural Bank hit a historical high, with a dividend yield exceeding 5%. Dividend index's latest yield exceeds the ten-year treasury yield.
Investing in stocks for higher dividends is a viable option, especially considering the dividend index's recent decline compared to the A-share index.
Fund heavyweights have seen a decline, making blue-chip stocks historically low. Further decline could present a rare opportunity for the next few years.
