A rebound on low volume, consolidating with fluctuations!!

$Shanghai Composite Index sh000001$ The A-share market has officially entered a phase of grinding consolidation with shrinking volume before the holiday. Today, the market continued its rebound trend, but trading volume directly shrank by tens of billions of yuan, a typical pattern of a rebound on low volume and consolidation. It's quite difficult to achieve a direct breakout with increased volume in the short term.

The closer we get to the Spring Festival holiday, the stronger the desire for investors to cash out and take profits, leading to a gradual cooling of market sentiment. With only three trading days left before the holiday, trading volume is highly likely to continue shrinking. The pre-holiday market is essentially in a phase of stable transition and narrow-range consolidation. A truly powerful counteroffensive rally will likely only start after the holiday when capital flows back.

It's important to remind everyone that today and tomorrow are the last days to sell stocks and withdraw funds before the holiday. There is inherent pressure for funds to be realized. If there is no incremental capital entering the market to take over, the probability of indices hitting resistance and pulling back after an initial surge is extremely high. Moreover, current trading volume has not yet broken through 2 trillion yuan. With insufficient volume, the interference of quantitative funds on short-term thematic plays will become increasingly apparent. Chasing highs is very likely to lead to being trapped. In terms of operations, it's crucial to slow down the pace and control your hands!

The current market shows a clear divergence in the trends of major indices, with significant pressure signals:

ChiNext Index: Firmly suppressed by the 20-day moving average, with severely insufficient upward momentum. Short-term upward power is weak, the market continues to contract, and the consolidation pattern remains unchanged.

STAR 50 Index: Has consistently failed to stabilize above the 30-day moving average, showing significant short-term pressure. The divergence in the trends of the two major growth indices, coupled with renewed adjustments in the tech sector, also confirms that the current market is in a consolidation phase, not a one-sided strong trend.

Looking at the brokerage sector, which serves as a market bellwether, after a pullback to the 20-day moving average today, it did not continue to fall further, indicating some support below. However, it is suppressed by the 38-day moving average above, presenting an overall narrow-range consolidation pattern. The brokerage sector's continued inability to gather strength and rally also implies that A-shares still face multiple pressures in the short term, making it difficult to stage a strong upward breakout.

Today, over 2000 stocks rose across the two markets, but the gains were scattered. There was no formation of sectoral synergy, nor a broad-based rally. In summary, bottom support is relatively strong, but upward momentum is insufficient. If volume continues to shrink, a minor pullback and adjustment in the market cannot be ruled out.

Although the A50 futures index is consolidating and Asia-Pacific stock markets are warming up, A-shares continue to follow their own independent consolidation path, with market risk-aversion sentiment gradually heating up. However, despite the low volume, the market did not fall sharply, instead showing strong resilience. This also indicates that this round of market activity is not over. The current consolidation, pressure, and caution are essentially accumulation actions during an upward trend.

From a market sentiment perspective, over 2000 stocks also fell today. The overall rebound pace has clearly slowed down. Hotspots are scattered and rotate rapidly, with prominent signs of stagnation on the board. The trend remains one of grinding consolidation.

Today, there was a clear shift in the style of capital on the board. Cyclical sectors like energy metals, minor metals, precious metals, and industrial metals were collectively active. Coupled with rebounds in low-position sectors like chemicals and fiberglass, capital has once again initiated a cyclical rotation, leaning overall towards defensive and risk-averse plays.

AI Applications: The media sector, which saw broad gains yesterday, directly diverged today. AI applications also faced divergence in the morning session. However, capital is deeply entrenched in this direction, and the trend will not easily end. It is highly likely to see repeated activity and rotational speculation in the future.

Among them, areas like AI healthcare, AI education, and cybersecurity are relatively lagging in gains, with strong short-term expectations for catch-up rallies. These are key areas to focus on.
Operational Strategy: Prioritize watching the leading stocks with high recognition at the front. If the front-runners don't offer entry opportunities, patiently wait for divergence and accumulate on dips in lagging but logically sound counterparts for catch-up rallies. Computing power engineering saw a slight rebound today, but internal divergence within the sector has already occurred. Coupled with pressure around the 4150-point level on the index, the tech sector still faces short-term pressure.

Commercial Aerospace: As emphasized before, when AI applications face divergence, capital is highly likely to flow back into commercial aerospace. This direction saw a weak recovery today, with the sea-based recovery concept particularly favored by capital. Hailanxin surged over 12%.

The commercial aerospace sector has a dense schedule of catalytic events. Even though it has recently seen capital diverted to AI applications and non-ferrous metals, leading to underperformance, this divergence is precisely the best opportunity for accumulation on dips. In the afternoon, focus on targets that have stopped falling and stabilized, and are core beneficiaries. Short-term recovery expectations are strong.

Although the short-term market faces pressure and consolidation is inevitable, the overall upward trend of A-shares has not changed, and bottom support remains quite effective.

Before the holiday, the rhythm is naturally one of grinding consolidation with low volume and accumulation. A steadier, slower market is actually healthier. Operationally, avoid chasing highs and being aggressive. Seize opportunities to accumulate on dips during divergence. Hold positions patiently and wait for the post-holiday market!