Hong Kong and US stocks have been suspended from trading in the past two days due to the Christmas holiday, leaving only the A-share market moving independently. Although A-shares rebounded for three consecutive days, compared with last week’s decline, both the magnitude of the rebound and trading volume appear weak.
Especially today, even after the major positive news about 'Category B Management' was released last night, the rebound remained limited without noticeable growth in trading volume. $SSE Composite Index (000001.SH)$ Today’s rebound met resistance around the 3100 level and hesitated to move forward; it might see a pullback after an initial rise tomorrow. $Chinext Price Index (399006.SZ)$ The rebound faced more obvious resistance at the intersection of the 20-day, 30-day, and 60-day moving averages, facing significant pressure.
Moreover, looking at the sectors that rebounded, today the pharmaceuticals sector led the declines, and the consumer recovery sector underperformed expectations by failing to significantly rebound, whereas high-growth stocks took the lead. Such a market condition is unhealthy and unsustainable. As mentioned earlier, 2023 will be driven by consumption-led economic recovery as the main theme, so any rebounds not aligned with this theme lack sustainability. The rebound in high-growth stocks is merely a technical oversold bounce after recent accelerated outflows, and one shouldn’t expect them to revive; calling it a dead-cat bounce wouldn’t be an exaggeration.
Therefore, based on today's rebound situation, I maintain the view that the short-term trend in A-shares remains a continuation of the downtrend. After last week’s sharp decline, the daily RSI has reached an oversold level, necessitating a few days of rebound for correction, but the rebound has already hit resistance levels. Tomorrow’s movement will be very...