The Nasdaq rallied sharply before pulling back; the rebound has not yet evolved into a reversal.

First, technology stocks have suffered consecutive sharp declines since last week, accumulating substantial trapped positions at higher levels. As prices return to previously dense trading zones, profit-taking by short-term traders and selling from investors seeking to exit their trapped positions will inevitably emerge. Institutional capital is also unlikely to allow these high-level trapped positions to unwind quickly, so the market will need further consolidation and pullbacks to digest this selling pressure.

Although the Nasdaq has already reclaimed the 25,000-point level, it still falls short of a genuine trend reversal. Only if the index subsequently breaks through and firmly holds above the significant resistance zone near 26,000 points can a reversal be further confirmed. Until then, the current move should still be viewed as a corrective rebound following an oversold condition.

Second, avoid haphazardly adding to positions that are deeply underwater; use rebounds as opportunities to optimize your holdings.

The top priority right now is not to hunt for more stocks, but to properly manage existing positions.

Many tech stocks have already rebounded close to last Monday’s highs, entering the prior congestion zone where substantial trapped positions reside. Institutional players are unlikely to allow all high-cost positions to exit quickly; instead, they will likely continue shaking out weak hands through volatility and pullbacks.

If your current tech holdings exhibit weak structure and carry heavy weight in your portfolio, consider moderately reducing exposure during the rebound. However, if your positions consist of strong leading names such as Micron Technology, SK Hynix, Lumentum Holdings, or Tower Semiconductor, and your position sizing is reasonable, you may retain part of the position for further observation.

Operationally, continue adhering to three core principles: never go fully invested, avoid chasing rallies, and refrain from blindly averaging down in a downtrend.

$Nasdaq Composite Index (.IXIC.US)$ $Micron Technology (MU.US)$ $Lumentum (LITE.US)$

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