A-shares opened higher collectively today, with a trend of fluctuation and upward movement for the index, sectors, and individual stocks. However, the strength of the rise was not strong, and the profit-making effect was not high. Especially at the end of the day, a mysterious bullish force lifted the market, further expanding the gains, but regrettably, it was a volumeless rise.
Facing today's A-shares' volume contraction and widespread rise in a fluctuating trend, it indeed confuses the market and investors. Is such a widespread rise without volume really good? Could it be a trap to lure buyers into the market? With these two questions in mind, let's analyze and answer from the following aspects.
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Firstly: Although the three major indexes opened higher and fluctuated upwards, the strength of the rise was indeed very weak. During the session, apart from insurance lifting the index, the rest of the securities, banks, liquor, and cyclical resource stocks were not strong. Of course, these heavyweight stocks did not sell off either, which might be the main reason for the market's inability to rise.
Secondly: Most individual stocks rose, driven entirely by technology stocks, such as the internet, software services, communication equipment, and components leading the way. As technology stocks rose collectively, they drove the recovery of small and medium-sized thematic stocks. Therefore, technology stocks drove a general rise in individual stocks, but unfortunately, the rise was mainly minor, and the profit-making effect was not high.
Thirdly: The trading volume in the Shanghai and Shenzhen markets shrank, which is a typical case of widespread rise with volume contraction. A lift without volume is just a trick, and a rise without volume cannot go high. At the same time, a rise with volume contraction indicates that market confidence is weak, investors' willingness to trade is low, and the atmosphere is cautious. Such a trend usually occurs during a trap to lure buyers into the market, after which the main force starts the trap mode.
Fourthly: According to the characteristics of today's A-shares market, the index rise lacked strength, the volume further shrank, and the profit-making effect of individual stocks was not high. Based on these three points, it can be proven that today's A-shares' widespread rise with volume contraction is a trap to lure buyers into the market. Such a trend is not optimistic, and one must be cautious of chasing highs in a trap to lure buyers into the market.
Can it still rise tomorrow on Thursday?
From the above analysis, today's A-shares' widespread rise with volume contraction has been confirmed as a trap to lure buyers into the market. The so-called trap to lure buyers into the market is to create opportunities for the main force to sell high and to attract retail investors to take over the market. This is unfavorable for the market on Thursday.
It is predicted that A-shares will open slightly higher collectively tomorrow on Thursday. After the opening, small and medium-sized thematic stocks will enter a divided decline, and cyclical stocks will come out to stabilize the index. This means that tomorrow on Thursday, there will be a trend of "stabilizing the index, falling individual stocks." The main drivers will be the rotation of cyclical stocks and technology, as well as the movement of funds, while financial stocks will continue to play a role in stabilizing the market.
To put it bluntly, tomorrow's A-shares will see index fluctuations, a general decline in individual stocks, and a trend of weakness, suffering, and widespread decline. The reasons are as follows:
1. The rotation between cyclical stocks and technology stocks, along with the movement of funds, will lead to a general decline in individual stocks.
2. The continued role of financial stocks in stabilizing the market will not be enough to prevent the index from fluctuating and individual stocks from falling.Firstly, has anyone noticed that recently the capital and popularity in the A-share market have been revolving around two sectors, either with cyclical stocks being strong or with technology stocks being strong; technology stocks have been rising for three consecutive days and are expected to correct tomorrow, while cyclical stocks have been falling for three days and should rebound tomorrow. Once cyclical stocks become strong, they can only protect the index from falling while individual stocks suffer.
Secondly, the current A-share market is in a stalemate between bulls and bears, lacking the momentum to break upward, and finding support when adjusting downward. This kind of volatile and deadlocked trend is expected to continue for a while; within the fluctuating range, sectors and individual stocks will diverge, with a few strong stocks continuing to rise, and most weak stocks returning to a weak downward trend.
Based on the above analysis, although the A-share market opened high and fluctuated upwards today, ushering in a broad-based rally, it does not bring joy to investors. This is because such an increase lacks volume and does not generate a profit effect. There is concern that the volumeless rise is a trap to attract more buyers, which is somewhat unfavorable for the market on Thursday. It is better to be cautious.
Since the outlook for today's A-share market is not optimistic, it is advisable to reduce positions when the market is high. When technology stocks fall back, small and medium-sized thematic stocks will be trapped again, and retail investors must be vigilant to avoid being repeatedly harvested by the main forces.
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