Hexun Investment Advisor Zhao Bingyi: Shanghai Composite and Software Services are both at low levels, still suitable for aggressive attempts

On March 24th, Zhao Bingyi from Hexun Investment Advisory said that the current market position is quite awkward. If it’s not falling, the Shanghai Composite weekly KDJ is below 0, indicating a relative low point has already appeared; if it’s falling, the 250-day moving average is not far below, and a further dip could reach it. The most confusing part right now is whether to cut losses and fear a rebound, or not cut and risk further decline. How should one respond in this situation?

First, clarify your holdings’ direction—are they related to the Shanghai Composite Index or the ChiNext Index? A reminder: if your holdings are related to the ChiNext Index, try to minimize trading. Although the Shanghai Composite Index has already shown a relative low point, the ChiNext Index has not yet bottomed out, and it may still fall further, so it’s better to avoid participating heavily in ChiNext-related stocks.

Earlier this year, I advised everyone to focus more on individual stocks rather than the index because the index was at a high level. Especially when the index repeatedly diverges at high levels, a decline of several hundred points is normal. We just can’t predict exactly which day a sharp drop will happen, so the best approach is to avoid it as much as possible.

Currently, the Shanghai Composite Index has an advantage of being at a relatively low level, making related sectors worth trying. However, caution is advised with ChiNext-related stocks. The software services sector is worth paying attention to; its weekly chart has already confirmed a low point, which was evident last week. The daily, 120-minute, and 60-minute charts are also in low positions. Overall, if you’re choosing stocks, look for those with relatively high cost-performance in this direction.

When unsure how to proceed, consider this: since both the daily and weekly charts for this sector are at relatively low levels, even if there’s a decline, the space isn’t large. Holding on might still allow you to break even. Therefore, operating in this direction might have a higher chance of success.

(Editor: Zhao Yanping HF094)

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