Hexun Investment Advisor Cao Bing: Yesterday's sharp decline, today's reversal - is this a prelude to a rally?

Point 3881 is a critical level that you must keep in mind. According to Cao Bing, a market analyst at Hexun, after yesterday’s sharp decline, the market once again staged a dramatic turnaround today. Behind the index’s rebound from weakness, a major strategic layout has quietly begun. Yesterday, there was reckless selling to wash out positions, but today, investors experienced a major reversal. The market opened high at 3849 points in the morning and rose steadily, but in the afternoon, the situation suddenly changed. The index turned downward, and just when everyone thought it would fall again, there was a violent rally at the close, ending the day at 3881 points, with over 5100 stocks closing higher.

First, last night, geopolitical developments took a positive turn. Once the good news was announced, the U.S. stock market responded with an immediate rally. Today, the A-share market also opened high, but unsurprisingly, quantitative funds took the opportunity to sell off. Fortunately, later, the banking and securities sectors stepped in to support the market, finally stabilizing the index. In the late trading session, there was a surge of capital rushing to buy stocks. Second, today’s trading volume shrank to 350 billion yuan, indicating that major players are not aggressively attacking and still have reserves on hand. Today’s market mainly served as a shakeout to guide and repair market panic. After analyzing today’s key signals, let’s look at how the market might move next.

First, as I always say, I firmly believe that 4200 points will be reached. A sudden drop caused by a black swan event is inevitable, but I am never afraid. As long as the underlying market logic remains unchanged and the economy is still driven by a bull market, the index will definitely break through 4200 points.

Second, each decline is painful, but it also presents valuable buying opportunities. Therefore, the overall strategy should be to remain bullish and seize low-entry points. We don’t need to buy at the absolute bottom, just at relatively low levels. Lastly, I have always emphasized that the most certain sector remains new energy—solar, energy storage, and power. Why? Because the positive fundamentals are already supported by data. After the geopolitical conflict over Russia’s oil and natural gas exports, exports have surged significantly. Additionally, China’s new energy, energy storage, and energy substitution exports are expected to see substantial policy support. This short-term certainty is much stronger than AI or other sectors.

（Editor: Wang Gang HF004）

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