Hexun Investment Advisor Chen Wei: The market shrank in volume to fill the gap. How should the signals be interpreted?

Today’s most important market performance is the gap filling. Many people are very frustrated about the gap filling, but some are very happy because seasoned investors know that gaps always need to be filled. However, this is a breakout gap; if it fills, does that mean the current wave of upward momentum is over? Hexun investment advisor Chen Wei believes there is no need to worry too much. Why? Because first, the gap that was filled today indicates that this gap is not a breakout gap, but rather a starting gap. It takes three days of confirmation without filling to be considered a breakout gap. Therefore, the gap filling today only indicates that there is market demand to pull back downward. So, does downward pullback mean that selling pressure cannot be stopped? No, today the trading volume sharply shrank, with today’s volume being less than 2 trillion, only 1.9 trillion. So think about what shrinking volume on pullback means? It means a washout, with volume increasing in the upward trend and decreasing during the pullback, making those who are timid continue to feel anxious at this position.

We believe there is still room for further upward rebound at this position. Next year, we should focus on the important support level at 3,858 points because this level is the neckline position of a double bottom formed on the 5-minute chart. If this level does not break, it will continue to rebound upward. The reason this rebound has stagnated at this position is that I mentioned the important resistance level of 3,936 points. Today it reached 3,937, and the upward pressure could not push through, which is why it fell back and continued to pull back. So, family members, if this rebound is to enter an accelerated phase again, we will continue to watch whether the 3,936 point can be effectively broken.