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Original Caption: Zheng Yan Sees The Market: General Decline Trend Cycle Stocks Differ Even More
On Wednesday, A shares opened higher and lower, and various stock indices closed lower by more than 1%. The Shanghai Composite Index fell 1.19% to 3,362.33 points and the Shenzhen Composite Index fell 1.74% to 2,254.30 points. The ChiNext saw the biggest drop, with the ChiNext composite index plummeting 1.88%. The Science and Technology Index 50 fell 1.74%. After-hours data showed that the net outflow of funds from the north was 1.569 billion yuan.
From a disc perspective, there are few varieties on the rise and insurance stocks are obviously stronger. China Pacific Insurance was up 6.04%, China Ping An was up 2.65% and only China Life was up very little. Some products in the automotive sector performed well, such as Changan Automobile, however, some products related to smart cabins in the automotive sector were hit by negative news and plummeted. There were many declines, and heavyweight products such as securities, pharmaceuticals, medical devices, and alcohol were weak. Cyclical stocks that have been active recently have diverged further, non-ferrous metal stocks have risen and fallen, and most of the chemical sector has adjusted.
“Drinking and taking medicine” is not right, and “dancing the charcoal” is not right. Both consumption and the cycle are “off the chain.” Naturally, it is difficult to rely solely on insurance to support the overall situation.
US stocks rose sharply overnight and the Dow Jones rose above the 30,000 mark for the first time in history. The important reason for the surge in US stocks is that vaccine news remains positive. News from the United States has confirmed that the first batch of vaccines can be issued next month. The new corona epidemic that has plagued Europe and the United States for a long time has finally appeared.
Fueled by the overnight rise in US stocks, A shares opened higher in early trading on Wednesday, but the trend was bad after that, and they fell almost unilaterally. We have controlled the epidemic very well and our response to the good news about vaccines is not as good as that of Europe and the United States. In addition, heavy products such as alcohol and drugs have fallen sharply and cyclical stocks have weakened, so the stock index performance is poor. However, investors do not need to be discouraged by A shares. Even if the good news for vaccines cannot support A shares in the short term, the medium term is expected to create a scenario for A shares to “turn into a better economic environment “. Therefore, in the medium term, they will remain A shares. Good.
Because Wednesday’s K line is too ugly, the market is likely to tighten even more in the near term, but it is difficult to fall too low. It is now the end of the month and some institutions are likely to settle more accounts, but as time passes, their payment behavior may weaken more and more, and the market will strengthen by then.
Another unremarkable sign from the broader market is liquor stocks plummeting. In the fourth quarter and at the end of the year, the main sectors adjusted in turn, and spirits stocks have remained strong, and now it is finally the turn of the stronger sector to adjust. This usually indicates that a full round of tightening is almost over.
The adjustment of medicines and medical equipment is related to some news of “centralized purchasing”, so the adjustment indicator for this sector is not clear, that is, it may not be able to explain any problems.
Investors can wait temporarily and watch it work, and those with light positions can gradually increase their positions to prepare for the upcoming spring market. Investors with inadequate research or little research capacity may focus on the products that fall first. In general, the adjustment of such products is relatively sufficient, such as the technology sector. Investors with stronger research capabilities have a broader selection of stocks and may target late-setting varieties, usually pharmaceutical stocks.
As for the procyclical actions frequently recommended by institutions recently, I think that even if investors intend to participate, they can only focus on the market in the short to medium term. They shouldn’t look too far, especially resource stocks. A long-term weakness in a sector must have its reasons for the weakness. Personally, I think it is more difficult for fundamentals to suddenly reverse.
