Weekend Review: An Important Technical Signal Has Been Broken—Is It an Opportunity or a Risk?

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Here’s a summary of the market, all content based on simulated trading, purely personal analysis, not investment advice. As market volatility intensifies, only with clear logic can one stay steady and go far. Remember: the market always puts risk first. Only by surviving can you wait for the bloom.**

The three major A-share indices fluctuated on Friday. By the close, the Shanghai Composite fell 1.24%, closing at 3957.05 points; the Shenzhen Component dropped 0.25%, closing at 13866.2 points; the ChiNext rose 1.3%, closing at 3352.1 points. The combined trading volume of Shanghai, Shenzhen, and Beijing markets was 2.3 trillion yuan.

Industry sectors showed mixed performance, with photovoltaic equipment, batteries, and power generation leading gains, while communications services, software development, kitchen and bathroom appliances, and chemical fibers declined. In individual stocks, over 660 stocks rose, with 39 hitting the daily limit. Photovoltaic stocks strengthened, with stocks like Sunpower Electric, Shouhang New Energy, Yongzhen Shares, Chint Electric, and Guosheng Technology hitting the limit up.

Funds saw net inflows of 6.724 billion yuan into photovoltaics, while semiconductors, IT services, and securities experienced net outflows, with semiconductors leading at 5.367 billion yuan outflow.

【Why did this bull market’s first drop below the 20-week moving average?】

First, look at some data:

· The main upward wave of the 2006-2007 bull market lasted about 12 months; the weekly K-line of the Shanghai Composite never closed below the 20-week moving average.

· The main upward wave of the 2014-2015 bull market also lasted about 12 months; the weekly K-line of the Shanghai Composite never closed below the 20-week moving average.

· This round of bull market (started September 2024): so far, the main upward wave has lasted nearly 10 months, but it has already seen closing below the 20-week moving average.

In the previous two bull markets, the 20-week moving average remained intact throughout the main upward cycle. In this cycle, within the same timeframe, this technical feature was broken for the first time. Behind this is a profound change in market logic.

Differences in driving logic among the three bull markets

2006-2007 was a period of concentrated benefits after China joined WTO, driven by export growth, the split-share structure reform, and RMB appreciation—fundamentally profit-driven. The 2014-2015 bull was driven by the mobile internet wave and leverage funds, with economic growth slowing but monetary easing and margin financing expanding from 400 billion to 2.2 trillion yuan—liquidity and leverage-driven reform bull.

This current bull, launched in September 2024, is during a global monetary order restructuring period. Its driving logic includes: reallocation of global funds, AI igniting growth stocks, residents’ asset allocation needs in a low-interest-rate environment, and policy tone shifts. It’s a new order and innovation-driven bull within an open system.

Why did the “first breakdown” occur?

First, the fund structure has changed. The previous two cycles mainly involved public funds, institutions, and individual investors, whose consensus made technical support levels more effective. This cycle, with increased proportion of quantitative and margin funds, sees these funds executing strict stop-loss strategies, leading to highly synchronized trading behaviors and concentrated selling pressure during adjustments.

Second, the external transmission channels have changed. During the previous two upward waves, external conflicts did not cause sustained shocks to A-shares. Now, conflicts like Russia-Ukraine and Middle East, through safe-haven sentiment, commodity price fluctuations, and cautious incremental funds, influence domestic investor behavior.

Third, policy attitude has shifted. In the past, the market had strong expectations of policy support. Now, regulators prefer to guide a “slow bull,” emphasizing market-based adjustments and avoiding direct intervention. After technical breakdowns, recovery depends on market forces, increasing difficulty.

The conclusion is simple: the previous two cycles were dominated by domestic capital in a closed system; this cycle involves a more complex fund structure in an open system. The first breach of the 20-week moving average reflects profound changes in the market environment. For investors, this means re-evaluating the applicability of traditional technical analysis.

【Market review】

Futures: one word — up. Crude oil continues to push past $119, rubber, methanol, coking coal, LPG, ethylene glycol, and other commodities surged sharply, with upstream resources remaining high, transmitting pressure downstream.

Index-wise, my bottom line of 3976 was broken on Friday. Technically, the break was clear yesterday; if no positive news over the weekend, further decline on Monday is possible. If the weekly close cannot recover 4015, the main upward wave of this bull market is likely over. But considering our slow bull pace, there’s still a chance for the next cycle—if we can recover 4015, the main wave can continue; if it drops further, look for support around 3906. Combining the participation of funds at this level on Thursday and Friday, a slight dip on Monday might be close to a bottom from a cycle perspective.

In individual stocks, most continued to decline sharply in the past two days, with very poor charts. Not only are the indices falling, but individual stocks are also retracing, increasing risk.

Major news:

1. The central bank announced: firmly maintain the stable operation of stock, bond, and foreign exchange markets.
2. Draft amendments to the Financial Law are open for public comment, aiming for a more sound market that protects investors long-term.
3. The government is considering gradually downgrading military actions against Iran, hoping for a quick market return to normal; this may indicate lowered expectations.
4. Shanghai Stock Exchange accepted the IPO application of Yushu Technology on the ChiNext.

【Old script position management】

1. Yixintang: affected by the market, shifting from right-side oscillation to continued decline. During abnormal moves, all stocks’ charts change; technicals are only useful in stable periods. Wait for Monday’s market; if a bottom is seen, it might turn back, but it takes time.

2. Daye Shares (recent strong stock): two consecutive large bullish candles (12cm, 7.6cm), with arbitrage gains of 8-15%. I warned about T+0 trading on Friday, then it surged. Don’t act now. Those holding Daye Shares avoided big drops. Hold until breaking 31+, then most trapped investors can exit.

3. Qimingxingchen: performed okay a few days ago, no panic selling, but Thursday and Friday saw emotional declines, breaking support. Next, it might return near the previous low of 13.5. Market unfriendly, with selling pressure and insufficient support below, so the chart moves toward resistance levels. It’s like a roller coaster returning to the start—wait for recovery.

4. Longtou Shares: the impact of the broader market on individual stocks is fatal. During Thursday’s decline, I warned to watch out. Most stocks are passive now. Whether it can stop falling on Monday is key; if yes, consider short-term exits around 9 yuan. If it continues to decline, recovery takes time, especially with April earnings season approaching, increasing uncertainty.

5. Geer Shares: short-term trend is bad. But as long as the market stops falling, it can reverse quickly, though gains are limited. Most positions have become trapped over months, very passive. Operate by either selling now or waiting for a rebound to decide, or hold long-term.

6. A certain health stock: also broke support. If no positive news over the weekend, Monday’s decline is likely, and most stocks will continue downward. Sector itself is fine; wait for support and reversal.

【New script and short-term game】

1. Yidao Information: relatively strong, traded near support for days, could have surged anytime but was also broken on Thursday and Friday. As long as the market stops falling, it will rebound quickly. Now, buying is all the same; technicals are broken, recovery takes time.

2. Beimei: positive restructuring news on Thursday, but no limit-up; Friday opened low, then recovered, but fell back. Formed a bottom here, will see in a few days. After a short-term rebound, there’s a chance for another surge—wait for the second big bullish candle.

3. Xingye (unpublicized): one of the strongest on Friday, still red at close, support holds if no breakdown. Weekend, Yushu IPO news is brewing; if related stocks surge, it might have a chance. Exchange rates and futures are positive, with momentum—wait for a surge.

4. A certain military and heavy industry stock: decent on Friday, but broke support on Thursday; short-term rebound unlikely. Wait for market support and bottoming out. No loss in holding for now.

5. Haiyang Technology (personal short-term): wait for support on Monday, then rebound; if not, cut losses and optimize positions.

6. Beidou Star: initially suggested because Geer was hard to rebound short-term, thought Beidou could surge. After the suggestion, it dropped over ten points. If it can’t hold 39.5 on Monday, risk increases; if it stops falling, it might surge next week to reduce losses and then cut. I also mentioned on Friday to T+0 out, which helped slightly.

【Thoughts on coping strategies】

During intense market fluctuations, technical analysis often lag behind emotional releases. When panic spreads, over 90% of stocks may temporarily break support, and technical patterns become invalid. At this point, judging whether the market has bottomed is less important—what matters is that, even if the market recovers, individual stock recovery paths vary greatly: some rebound strongly, some hover sideways, some may never return to previous levels.

Faced with this uncertainty, the most pragmatic approach is to accept the limitations of your choices. When some holdings are proven wrong by the market, cut losses and admit mistakes—this is responsible for your account. Keep some positions for clearer signals; passive waiting in uncertainty is less proactive.

Investing is never about “not losing money,” nor about fighting the market. When volatility occurs, opportunities and risks are always paired. Diversification helps: you won’t bet everything on one stock; when most stocks weaken, a few may stabilize first, giving you room to adjust and choose.

Learning to choose and abandon is true skill in navigating volatility.

【Performance review】

From the beginning of the year to now, our picks for limit-ups and big trends:

Before New Year: Rainbow Group, Rainbow Shares (both limit-up), Ningbo Ocean (limit-up), Zhongrui Shares (3-4 days limit-up), Zhongshui Fishery (second wave after 11% rise), GCL System Integration (after re-accumulation, became a hot stock)

After New Year: Huayin Power (28 consecutive limit-up), Intelligent Control (28 consecutive limit-up), Chuanfa Longmang (double limit-up), Yidao Information (two days of large bullish candles close to limit-up), Jiangnan High Fiber (limit-up 15%), Huaneng International (red 2+), Gansu Energy Chemical, Orchid Science and Technology (2-3%), Daye Shares (12cm, 7.6cm arbitrage), Hengtian Hailong (three days 20%), Shunna Shares (one-day limit-up)

Just a few examples, and they doubled in value. That’s stock-picking vision.

【Closing】

Reviewing the market is a habit and a form of cultivation. Spending half an hour daily to analyze the market and review holdings, even a little progress, compounds over time.

This week is tough, but the market never lacks opportunities—what’s missing is the eye to find them and patience to wait. Learning to choose and abandon is the real skill to survive volatility.

If you find review helpful, please like, comment, and interact. A simple like makes a difference—earning a million a day is not a dream! See you tomorrow!

Market is unpredictable; take care of yourselves. Wishing everyone calm and steady. — Da Yun.