Hexun Investment Advisor Wen Taibin: Sharp decline on lower volume, will there be a turning point tomorrow?

Today’s A-share market fell sharply on shrinking volume—will tomorrow bring a turnaround? He Xun Investment Advisory’s Wen Taibin believes it’s difficult to see a turnaround. People who follow Old Wen know that what we’re seeing right now is a stage of a declining wave; in the short term, it’s hard to expect a turnaround. Here are three reasons. First, at present it’s still a game of contesting with existing capital, and there are signs of retreat. Today the market again narrowed to more than 1.8 trillion, and with the pre-holiday effect, investors’ cautious sentiment is strong. Second, from a technical perspective, Old Wen has consistently believed this is the adjustment phase of the larger fourth wave. The price action is complicated, with a relatively long duration. After yesterday’s big rally, today—except for the North Exchange Venture 50—other major stock indices all set new intraday lows from yesterday, with the focus shifting downward. Third, in terms of sectors, the rotation between high and low is clear. There are only a few defensive directions: oil, banks, and some local consumer shares finished slightly higher. Technology stocks fell across the board. This is a weak order-book pattern. Based on all of the above, risk still outweighs opportunity right now. Most retail investors should wait for stabilization and not blindly try to bottom-fish.

(Editor: Wang Gang HF004)

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