The bustling stock market

The market is now ready to start a new uptrend.

On Wednesday, November 2023, 11, the market opened 15 points higher at 21 points, and then slightly rose to the highest point of the day at 3077 points, then fluctuated and fell, and then slightly fluctuated and climbed again before falling step by step; in the afternoon, it opened slightly and fell back to the lowest point of the day at 3080 points, and then slightly fluctuated and climbed again, and closed at 3064 points at the end of the day, up 3072 points, with a turnover of 16 billion yuan, and closed with a small negative line. The market opened high on Wednesday and fell back to close with a small negative line, so how likely is it that the market will break through with a long positive line?

The market climbed slightly on the previous trading day and stood above the medium- and short-term moving average. On Wednesday, it opened higher due to the surge in external stock markets, but opened higher and closed lower again, forming a small negative line, and left a gap. This trend shows that the market is in a dilemma. The upper 60-day moving average is at 3082 points, and the lower medium- and short-term moving averages converge at 3050 points. On Wednesday, the market recovered the medium- and short-term moving averages and should have the desire to break upward, but it stopped before the 60-day moving average. It can only be said that the rise of the market is more of a passive retreat of the bears than an attack by the bulls, and the short-term trend is still uncertain.

Affected by the overnight US data that exceeded expectations, the A-share index opened higher on Wednesday and remained in the red throughout the day. More stocks rose than fell, and the overall sentiment was good. The turnover of the two markets was 9900 billion, close to one trillion, an increase of nearly 39 billion compared with the previous trading day, and northbound funds bought a net of billion.

On the evening of the previous trading day, the U.S. Department of Labor announced that the CPI for October fell from 10% last month to 3.7% year-on-year, lower than the market expectation of 3.2%, the smallest increase since July 3.3. The more critical core CPI fell from 2022% last month to 7% year-on-year, lower than the market expectation of 4.1%, the smallest increase since July this year. The decline in U.S. inflation data has made the global capital market boil. The mainstream funds in the market believe that the current round of interest rate hikes by the U.S. Federal Reserve has ended, and the focus has shifted to when the U.S. Federal Reserve will cut interest rates. Affected by this, the U.S. dollar index fell, and major global assets rose across the board.

In terms of domestic monetary policy, the central bank released 6000 billion yuan of MLF on Wednesday, the largest amount since December 2016. The People's Bank of China explained in the announcement that the MLF operation this month was to "hedge the impact of short-term factors such as the peak of the tax season and the payment of government bond issuance, while appropriately supplying medium- and long-term base money." Therefore, there is nothing to worry about at the monetary level.

In addition, the Hong Kong Stamp Duty Amendment Ordinance will take effect on November 11, and the stamp duty rate for stock transactions will be reduced to 17%, so the performance of Hong Kong stocks on Wednesday was much stronger than that of A-shares. In summary, it is still believed that the current A-share market is in an excellent trading window period.

The market's rise from 2923 points has evolved from a short-term rebound to a mid-level rise. It has been running for 17 days. From a time perspective, it is expected to rise to the time window of the 21st. From a spatial perspective, it is just near the high point on Wednesday, which means that the market is likely to encounter resistance near the 60-day moving average and fall back. Unless there are more and bigger positive news stimulation and more new funds entering the market, the market is likely to break through the 60-day moving average and impact the semi-annual and annual lines, and it is possible to extend this wave of rising market to the next time window of 34 days.

In terms of sectors, the new energy track collectively strengthened, and photovoltaic, lithium battery, energy storage and other directions generally rose. King Kong Photovoltaic, Yishitong, and Funeng Dongfang rose by 20cm, and more than 10 stocks including Tuori New Energy, Sichuan Energy Power, Xianfeng Holdings, and Jinlongyu closed the board.

On the news front, China and the United States issued a Sunnylands Statement on strengthening cooperation to address the climate crisis. The two countries decided to launch the "21s Enhanced Climate Action Task Force". The market expects that new energy products can be exported faster to absorb the excess production capacity newly built in the past two years.

The new energy track sector has entered the bottoming stage, and the trend is likely to fluctuate, but there is no need to be as pessimistic as last month. In the auto parts sector, Yinbaoshan New Energy has been on the daily limit for four consecutive days, and many stocks such as Weitang Industrial, Desay SV, Mingke Precision Technology, Qiming Information, and Jiangling Motors have hit the daily limit. On Wednesday, this sector has a new driver, and Xiaomi Auto is finally going to reveal its true face.

The Ministry of Industry and Information Technology announced the declared model information of Xiaomi Motors on Wednesday. The public information shows that the Xiaomi Motors product trademark is Xiaomi, which is a pure electric sedan and is manufactured by Beijing Automotive Group Off-Road Vehicle Co., Ltd.

According to the pictures, the logo on the rear of the Xiaomi car is "Beijing Xiaomi". In addition, the battery supplier for the ternary lithium battery version is CATL, the engine supplier is Inovance United Power, and the peak power of the drive motor is 220kW/275kW; the battery supplier for the lithium iron phosphate version is Fudi Battery, the engine supplier is United Automotive Electronics, and the peak power of the drive motor is 220kW.

People familiar with the matter said that Xiaomi Motors will start mass production next month (December) and will be available for sale in February next year. Previously, Lei Jun said that Xiaomi Motors' first car will be mass-produced in the first half of 12.

Domestic automakers, whether new or traditional, have greatly increased the international competitiveness of my country's auto manufacturing industry while being extremely involuted. Domestic auto parts manufacturers have also grown along with the rise of domestic automobiles. Whether driven by the Huawei concept or the Xiaomi concept, the growth of various auto parts manufacturers is certain. Therefore, we should also spend more energy to explore and track in this direction.

There have been many good news recently, expectations for a reserve requirement ratio cut have strengthened, there is no foreseeable bad news, funds from the Mainland-Hong Kong Stock Connect have flowed in again, and the financing balance continues to hit new highs. These signs all mean that it is highly likely that the market will continue to expand its upward space. Although the gap on Wednesday is more likely to be filled, it is not impossible that it will become a breakthrough gap. As long as the market continues to rise tomorrow, it will be able to recover the 60-day moving average and return to the previous small platform area of ​​3100 points. Due to the expectation of good news over the weekend, the market will have a chance to launch a long-term surprise attack on Friday this week, and is expected to hit the annual line.

Although we have been hoping that the market can confirm the start of a new round of upward trend with a symbolic breakthrough long positive line, at present, this possibility is actually not great. Tomorrow, the market is likely to fill the gap on Wednesday, but we hope that it will open low and close with a positive line after filling the gap, rather than opening high and closing low like Wednesday. If the gap can be kept without filling, it is expected to become a breakthrough gap, and the chance of ushering in a long positive line will be greater. Therefore, tomorrow's trend has a certain directional significance for the current market, and determines whether the market will continue to rebound or bottom out again.

The point I want to emphasize is that the market has already met the conditions for starting a new upward trend. The only shortcoming is the capital side. The lack of new capital inflow is the biggest reason why the market lacks upward momentum, especially the long shadow that opened hundreds of points higher on August 8, which formed huge pressure. Both the annual line and the semi-annual line have fallen within this long shadow, which means that the market can only confirm the establishment of a new upward trend after recovering this long shadow. Before that, many attempts are needed. I hope that the market can start the first attempt next week, otherwise it can only bottom out for the second time and then re-brew a new upward trend.

Therefore, the market opened high and closed low on Wednesday with a small negative line and a gap, indicating that the market is in a dilemma. It faces pressure of a correction in the short term, but the current situation is more supportive of an upward breakthrough. The choice depends on many factors, and how the market performs tomorrow will have a directional significance for the short-term and even medium-term trend. Even if the market chooses to bottom out for the second time, it should be regarded as the last opportunity to buy low. It is more hoped that the market will directly break through with a long positive line to start the market, and use a long positive line of 100 points to recover the long negative line of 100 points and start the main upward trend across the year.