【Offensive and Defensive Trading Strategies】——March 19 Pre-Market Analysis

Objective Information [Taogu Ba]

After the index fluctuated in the morning, it generally rebounded in the afternoon. The entire rebound process did not see increased volume, and the short-term correction trend of the Shanghai Composite Index has not changed. Temporarily reclaiming the 4050 level is a good thing, as it somewhat reduces the probability of testing 4000 points (just reduces, not excludes). However, if it quickly falls below again later, the expectation remains valid. Additionally, the index’s decline with volume and rebound with shrinking volume continue to persist. Overall, there are no clear reversal signals.

Regarding market sentiment, today saw normal differentiation. After Yunnan Energy Holdings stabilized, the overall trial-and-error cost decreased. Although there was some differentiation today, it remains within controllable range, and sentiment risk is temporarily low. Moving forward, the market is likely to maintain this lukewarm state—no major risks, but few big opportunities.

In terms of sector hot spots, today’s relatively active sectors are computing power and storage chips. Other sectors, especially those only moving in the afternoon, are relatively passive in rhythm. Therefore, only computing power and storage are currently tracked for short-term follow-up; other sectors need to see a breakout in strength before tracking again.

Personal thoughts:

From the intraday rebound path, on one hand, the rebound lacked volume, indicating liquidity did not show active participation. On the other hand, the overall market performance in the morning was not strong; it was only in the afternoon that a concentrated rebound occurred. This rebound mainly manifested in breadth rather than height, meaning funds were cautious and only dared to act when they observed relative safety intraday. This cautious rhythm also indicates that funds are still passive. The afternoon rebound feels somewhat hesitant—both eager and afraid of getting hurt. It was not very proactive and even consumed a large portion of potential buy orders, which is not good for the next day’s market. It could lead to a lack of opposing volume the next day. From all perspectives, this does not form a reversal expectation; it can only be seen as a normal oversold rebound during a decline. A volume-increasing bullish candle is needed later to confirm a reversal. In other words, the index remains in a wave correction structure without invalidation. Continue to expect weak oscillations or weak corrections.

In terms of direction, only storage and computing power are active; the rest are passive. During this wave of index adjustment, these two sectors were the first to enter the observation horizon. If they can maintain a rhythm significantly stronger than the market during the correction, and if the market stabilizes and rebounds later, these sectors could become the main drivers of the next wave of index trends. Therefore, regardless of whether the market rises or falls, they are now under observation—only a series of active adjustments would invalidate this expectation. The current focus is to add these two sector indices to your watchlist, along with the stocks that have performed strongly in recent days.

From the market performance perspective, the recent low-position rally has been relatively strong, while some previously popular high-position stocks have been more passive. For example, storage stocks like Longke and Tongyou, which have recently risen from low levels, are typical of this pattern. The computing power stock, Zhengji Information, is also a low-level emerging sector. In contrast, the previous popular stocks like Tuowei and Huasheng lagged behind in rhythm and were passive. Currently, it’s important to monitor whether these sectors can continue to emerge strongly from low levels. These stocks may also become the main target pool once the market stabilizes and begins to rebound.

Writing is not easy; the core logic of the review is summarized above. If you find it helpful, please give a like and leave a comment to boost the post’s visibility so more brothers can see it. Let’s work together to avoid pitfalls in this market. Thank you all for your support!

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