A Shares Are Entering The Second Wave Of Bull Market

The current policy environment can be described as an unprecedented full support for the stock market.

The latest orientation of domestic policies shows that management supports capital to enter the A share market.

Before and after the "two sessions", the high level of optimism and encouragement for the stock market is unprecedented. Following the announcement of the chairman of the securities and Futures Commission Xiao Gang, the governor of the central bank, Zhou Xiaochuan, also insisted that "capital entering the stock market is also supporting the real economy". This statement shows that the position of A shares in China's economy has been fully promoted.

Moreover, it is not just a change in oral attitude, but also substantial policies such as Shenzhen Hong Kong Tong, pension market timetable, trillions of local debt replacement, and interest rate reduction.

The change of attitude is accompanied by substantive actions. The policy has injected great benefits and good expectations to China's stock market. First, the bank will get the license of the securities dealer, then the pension market will enter the final stage, then the trillions of local government bond swaps, which can be said that each implementation is enough to change the information about the trend of the A shares. Once fully implemented, it will fundamentally change the current policy and financial situation of the A share market.

On the capital side, despite the accelerated issuance of IPO this year, from the market operation and daily turnover, market confidence and peripheral incremental funding continue to move to A shares.

Over the past week, the number of new A shares has reached a new high since July 2009, and the Shanghai stock index has exceeded 3400 points.

In the headlines before the "red weekly", it has clearly indicated that the Shanghai stock index will complete the confirmation of the 3478 breakthrough before mid April.

Today, happiness is faster than expected, and A shares are expected to continue to attack at a higher level.

Volume first, the recent incremental capital market is obvious, the margin growth rate also significantly accelerated, and the rapid entry of incremental funds will help to break the game of stock funds; the central bank this week increments 500 billion MLF to inject liquidity into the market; second, by the development of a number of favorable banking policies this week, the blue chips represented by bank shares are opening up space.

From a technical point of view,

After the first surge in the fourth quarter of last year, the two wave was adjusted for only one month. It showed again that the bull market in A shares is the characteristic of mad cow.

After the 3478 point, the market has lost too much accumulation area of intensive chips, and the monthly price and price match is good.

Speaking of hot spots, since the second interest rate cut in March 2015, with the continuous liquidity,

Before the "28" phenomenon and "82" phenomenon, in the recent market, there has been a certain change, showing the heavyweight and theme stocks rose.

Therefore, when anticipating the future hot spots, we should not only expect the blue chips to emerge at any time, but also fully anticipate the continued performance of the theme stocks.

Overall, the gem and motherboard have reached a new high. The next stage is expected to show a trend of "28" rising, and the basic characteristics of the bull market will be further strengthened.

But we must also realize clearly that

A share temperature rise will bring some negative factors at the same time. As the policy level is making great efforts to expand the capital market, the concept of A shares will become insane. The stock market is heating up and the stock market is too popular. The stocks with a price earnings ratio of several hundred times can be found everywhere. Overdoing anything can lead to the suppression of the policy and trigger a fall. For example, last year, the search for the two financial melts led to a sharp fall in the stock market, so we still need to pay attention to the latest policy developments.

From the valuation point of view, the gem price earnings ratio is hovering around 96 times, and the SME board is about 64 times.

With the gradual formation of registration system and delisting mechanism and the opening of the Shenzhen Hong Kong link in the future, the A share market will be integrated into the international financial system from various aspects such as valuation system, trading habits and investment style.

A major breakthrough in the economic front before and after the "two sessions" is the core factor that triggered the market.

The problem of debt rate in China's biggest hidden trouble has made breakthroughs. The government is dissolving it through debt replacement, and the vigorous development of the capital market has become the core link to resolve China's financial risks.

Along with the anticipated warming of the A share bull market, large funds continue to be underestimated and valued blue chips. Especially in the face of the valuation and gains of the whole small cap stocks, the main funds are not willing to sell blue chips. On the contrary, smart main funds continue to overweight the allocation of blue chips, which is different from the six thousand main points in 2007 and more than 3000 main funds in 2009.

The three forces in the A share market have been resonating. One force is the emerging strategic industrial unit represented by the Internet, the other is the heavyweight represented by big finance, and another force is the traditional consumption and medicine plate with high defense value.

Currently, the main category of hot money is the first category, and the main funds continue to intervene in the remaining two categories. In the previous headlines, we mentioned: before the market has broken through 3400 points, the first category in the consolidation pattern will be the mainstream hot spot. Once the market has finished consolidation, for example, under the stimulation of interest rate cuts or policy incentives, we will have to turn to a new breakthrough. We will have to turn to the second category, and buy third categories to buy up.