Massive Additional Share Issuance Is Fiercer Than a Tiger
2008/2/20 15:27:33
That time at 5,200 points, Ping An's additional share issuance was the last straw. Today, along comes another one from SPD Bank. Although it's not an official announcement, it's already enough to turn the market around.
Right now, the bulls need to fight like Liverpool. Three handballs not called, hanging in there until the final moment to finally break through that last sheet of paper. Currently, the new fund issuances are equivalent to having one of the bears sent off with a red card. But to finish off the bears, you need patience. Today's additional issuance farce is like one handball not being called—there will likely be more such uncalled handballs to come. Until past the 85th minute, you won't see any hope of victory.
Technically, this 1-minute uptrend is definitely not going to work. The best-case scenario here is oscillation forming a 5-minute hub, to see if it can develop into a 5-minute uptrend—note, this is the best case. The worst case, of course, is if after oscillation around 4,575, a third-type sell point appears, which would mean retesting the bottom.
On the medium-term, if 4,672 can't hold, the real rally won't unfold—it will remain a continued oscillation trend, equivalent to the dull battle of the first 85 minutes this morning.
The bulls need their first goal, and this goal must come from a sector breakout. The agriculture stocks that this ID has been emphasizing are now collectively strengthening—600737 has shamelessly hit new highs again. Whether this sector can drive chemical stocks and others, gradually spreading the hotspots, is what needs to be watched going forward. Sometimes the fire gets lit but can't spread—in that case, you just have to lower the flag and wait for the next opportunity. This kind of thing happens often.
Earlier I mentioned agriculture, environmental protection and new energy, and chemicals—these are all very easy to understand. As for consumer staples, this is actually China's greatest advantage—various consumable goods. For eating, including condiments and such; for daily use, which covers many areas. For example, as automobiles develop, auto parts like tires, glass, and the like—things that need constant replacement and use. What does China have the most of? People—and therefore consumption. This is an eternal theme. Alcoholic beverages are only a very small part of it.
The real timing for a medium-term breakout may indeed have to wait until around March, as previously mentioned. So patience is essential. The most proactive approach is to chase the strongest sectors; the most conservative approach is to buy on dips those stocks with medium-term potential that are just starting to move, such as high-dividend stocks.
- It's now completely running counter to the broader market as a hedge. Once above the hub, the risk starts to increase. Of course, if the market breaks down, there'll be a surge of impulse, but the risk is enormous. Ordinary people should just watch.
Signing off for now. See you.