Category: Money tips Release Date: 2007-03-06
Source: Morgan Stanley Investment
Since the previous high of last week's tape upside down, after returning empty-handed there ascribed to this week in a variety of tape under the influence of negative factors, the re-adjustment, especially in the weekend market panic down.
From a purely technical point of view of the current index structure, we must first be clear that we are living in an obvious form of adjustment, while the corresponding form of this adjustment is that since December 2005 until the end of 2007 five upward trend since 2005 years in December since the two cities out of the major indices have significantly increased the five-wave form, May 29 after the introduction of stamp duty on the crash confirmed the intermediate adjustment, followed by a rebound despite Shen Chengzhi and the Shanghai and Shenzhen 300 Index have hit a new high , but only adjust the shape of a strong rebound is not the beginning of a new round of increase in Quotes (on a strong rebound to new heights in the wave theory of long set), due to the strong rebound characteristics, usually followed by a decline will not be fall below the low of the previous round, the most likely form of adjustment is slightly tilted upward zigzag. However, due to lack of adjustment time, did not rule out other adjustments out of the more complex patterns, such as the triangle also not be ruled out. Generally speaking, the market is still going through an adjustment process.
If the rebound after plunge 5.30 is to confirm that at the top, once the top is confirmed, then we need to confirm at the bottom. Therefore, the short-term bottom of 3400 points is clear, but because the time is not enough, they still require a confirmation process. Test a low at 3800 points this week, two first-line rebound, as it has been close to the 60-day moving average, while the 60-day moving average is the CBBC watershed, it rebounded. However, the rebound was too short, the intensity is too weak, has basically confirmed that over 4,000 points for policy-top, while the 3400 points, you may need to re-confirmed. Therefore, the short-term market trend can not be optimistic about!
Let us analyze the current point of view from space, the market structure, as of this week's close, the two cities is about 1 / 3 or more varieties from May 30 have been in more than 50% fall in more than 60% of the stocks from the line has been less than a year 20% of the space, the location of one-year line of bull and the bottom is almost synonymous with more than 50% of the decline means that the adjustment so far has opened up the next round of Quotes space, from this perspective, there are part of the stock at current prices is already in the region close to the vicinity of the bottom of the next Quotes.
Recently, a number of large capitalization stocks, stocks that more resilient, with some investors that the stocks that will not be dropped, so have to sell shares in the hands of the disadvantaged in favor of chasing stocks that times of adversity, in fact, only a provisional stage in this market characteristics, such as market the declines continue, the strong stock inevitably fast Budie to form the open-end fund redemption wave of vicious circle. Therefore, the current market at a critical moment, investors do not recklessness, not chasing a strong varieties. For a number of significant decline in species, at present the majority of their decline has reached 50%, the share price close to year-line, and then flesh has been inappropriate at this location, investors may wish to take T +0 methods of operation and gradually to reduce costs, or the holding patient wait for the emergence of a rebound.
