The Heavyweight Defense Counterattack &Nbsp; The Gem Is Racing Ahead.

This week, the Shanghai and Shenzhen stock markets have seen ups and downs.

On Monday, the A shares plunged and the Shanghai Composite Index dropped to 2491 at the lowest point in the year, which was only 2481 feet away from the lowest point in the year.

On Tuesday, the market continued to be weak and collate.

What is striking is that since Monday, the turnover of Shenzhen stock market has surpassed the Shanghai stock market for the first time.

Correspondingly, the gem and small and medium-sized plate stocks traded vigorously, and the gem index rose more than 4% on Monday.

But on Wednesday afternoon, there was a dramatic episode in the market.

On that day, CITIC Bank was caught up in hot money in the afternoon.

Affected by this, bank stocks rose across the board, real estate stocks also followed up, and the Shanghai stock market exceeded the Shenzhen stock market.

On Thursday, due to the lack of willingness to catch up with the market, financial and real estate stocks were significantly blocked, dragging down the broader market, and the stock market opportunistic rise again.

Gem index rose 3.68% on that day.

On Friday, the heavyweights and theme stocks were relatively balanced, and the low price overrun stocks such as steel, coal and nonferrous metals, which had long been left out by the market, were rising. The two cities were reluctant to accept the red market.

Looking back at the trend of the market in a week, the most active part of the market is the Shenzhen stock exchange board.

It is precisely because of the continued activity of the gem and small and medium-sized boards that the Shenzhen stock market has exceeded the Shanghai stock market in most trading days this week.

This is a landmark event: due to repeated world economy, sharp fluctuations in European and American stock markets and commodity prices, and domestic real estate regulation and other factors, investors' expectations of earnings in the traditional industries have been lowered.

Of course, we also note that this concentrated speculation on small cap stocks is at the expense of the market value of the index stocks.

In the first half of this week, China Petroleum, Sinopec, industrial and Commercial Bank of China, construction bank, Bank of China, China Merchants Bank, Shanghai Pudong Development Bank, Bank of communications and many other index stocks hit a new low.

Until Wednesday, with the strong limit of CITIC Bank, there was a Jedi response.

It should be pointed out that, despite the constraints of fundamentals and funding, most of the weight index stocks are not viable, and there is a lack of momentum to continue to push up. But it is undeniable that if they sink blindly and destroy the relatively stable operation environment of the market, the hype of the low and medium circulation market value stocks such as the gem will not last at all, so the two plates need to maintain a moderate balance.

It is precisely because of the strong rebound in index stocks on Wednesday that the Shanghai stock index effectively fell below 2500 points before making the theme stocks such as gem on the Thursday continue to rise.

On Friday, the steel, coal and non-ferrous metals sector could be regarded as a cautious market for strong sectors.

Basically, the data released by the National Bureau of statistics show that in May, the sales price of housing in 70 large and medium-sized cities increased by 12.4% over the same period in May, the first time to fall in 14 months. In May, the consumer price index (CPI) rose 3.1% compared with the same period last year, and the price of PPI increased by 7.1% over the same period.

Market expectations, because the prices of agricultural products and commodities have dropped, the CPI and PPI in the year may be a relatively high point in the year. Therefore, the economic data for May may not trigger any immediate adjustment in monetary policy.

It is encouraging to note that in May, China's import and export value was 243 billion 990 million US dollars, up 48.4% over the same period last year, much better than the previous market forecast.

This has a positive effect on stabilizing stock market expectations.

This week's big market index basically resisted the "stress test" brought about by the collapse of the peripheral stock market. The two sides basically reached a new dynamic balance above the 2500 points.

What is relatively lacking is that the volume of volume at present is always difficult to enlarge continuously, or it is difficult to maintain stability after enlargement.

In a sense, this implies that the recovery of market sentiment is far from being completed overnight.

Technically, the Shanghai Composite Index has been running for 3 weeks since its lowest level in May 21st to 2481.

This week, in the unfavorable atmosphere of the Dow once fell below 10000 points, it did not innovate at a low level, which made the probability of building a composite bottom in this market greatly increased.

In view of this, it is suggested that investors in the near future can appropriately reduce the concern about the low innovation of stock index, and focus on the comparative value and technical characteristics of stocks, and combine the hot spots of the market, and take short-term opportunities as appropriate under the premise of reasonable expectations.

We believe that in the case that volume is difficult to go up again, the market will maintain a trend of concussion for a period of time. During the period, stocks will rise and index will be repeated again and again.

It is expected that the Shanghai Composite Index will have a higher technical pressure in the vicinity of the previous high point of 2686 points (which can be regarded as the bottom of the composite base).

From the perspective of stock selection, there are many middle tier and second tier growth stocks at the intermediate level between the strong gem and the stagnant index stocks. The valuation is attractive and can be properly integrated with the fundamentals, subjects and technical aspects.

(Jiangnan securities Qiu Chen)