Category: Money tips Release Date: 2006-04-22
Last Thursday, for investors is Cry of the day, the Shanghai Composite down nearly 85 points a day, the two cities both indexes fell about 5%, the highest in four years the second-largest single-day record drop. After the plunge again, and the prices afternoon will evolve?
Last Thursday's sell-off, mainly due to two reasons. The one hand, the accelerated pace of new share issuance. Short-term perspective, issuing new shares pace has accelerated noticeably. Last Friday a week 21, Wednesday 2, Thursday 1, Friday 1, six trading days, there are six new offerings. In particular, last Friday, "jump the queue" announcement issued not more than 50 million shares of the Datong-Qinhuangdao Railway, and is larger than Bank of China's ICBC will also be issued A shares and H shares of the rumors, a direct result of the crash of the stock. On the other hand, interest rates also contributed to rumors that the empty side of arrogance. Last Thursday, there are rumors that the central bank will be announced in mid-July interest rate hike, which makes short-term decline worse.
However, I am afraid that these two reasons are insufficient to reverse the trend of stock. First look at IPO rhythm problems, short-term distribution is indeed fast rhythm, but the climax of this wave of release in the past, the face of short-term situation, the management will certainly have to adjust the rhythm of this short-term negative factor for the soon Council in the past. The issue of the bank, it will only index before and after the release a short-lived impact. Let's look at interest rate factors. First, there is pressure to raise interest rates do exist, as compared with rate hikes and yuan appreciation point of view, the side effects of interest rate increase is even smaller. However, recent news perspective, the central bank increases interest rates are still hesitant about whether short-term interest rates could become a reality there is uncertainty. Secondly, in theory, interest rates will raise funds to risk-free rate of return requirements, drive down market as a whole the level of price-earnings ratio. However, from a realistic point of view, if the one-year deposit rate increased from 2.25% to 2.5%, it is difficult to imagine there are many to choose from the stock market withdrawal of funds transferred to the savings. At the same time, 2.5% in theory should be able to support about 40 times earnings, the present Shanghai and Shenzhen level of the overall price-earnings ratio below 25 times only. Again, from the U.S. stock market performance, in its course of raising interest rates 20 times, the Dow Jones index is rising. Therefore, to increase interest rates does not mean the stock will definitely drop.
From a technical perspective, could not arrive at this index peaked conclusions. On the one hand, the stock fell, from a technical point of view and the details of the comparison that is similar in early June, while the fast or slow up to this is the bull market characteristics. On the other hand, removing the factors listed Bank of China, short-term fluctuation range of stock maintained at 1600 points to 1700 points, and are thus, in fact the form of stock is still a head and shoulder at the end of the embryonic form is June 14 at the end of the 1512 points and are now running right shoulder shape.
Therefore, comprehensive fundamental and technical perspective, the strong foundation stock has not fundamentally shaken, though the reduction in short-term intense, but still finishing in the normal within the context of technology. At the same time it should be noted, with the index on the center of gravity shift, stock change, excess market liquidity factors such as the support is weakening. So, the next stage, the strength index may be mainly shock pattern downturn is likely to break 30, moving average, but 1600 should be stabilized at around ability. After finishing high innovative potential, but will not be much space. In this process, the differentiation of individual stocks than the pre-heated, high-quality opportunities to share a lot of pressure on poor stock return is also a great value, structural adjustment will become a hot spot mainly.
Operation, in order to emphasize that the bull market of the substantial correction, is a better chance of structural adjustment positions the same time, even when the bears turn in cattle, in large Yinxian the bottom of the throw is often wrong choice, followed by a rebound in a better selling point often occur. Therefore, the current major operational strategy should be in the rebound process, will be gradually replaced with low-quality stocks high-quality stocks. Individual stocks, the short-term may be concerned about the G Qixia, G orchids, G Tianye so.
