Hexun Investment Advisor Wen Taibin: A Good Start in April—Are the Opportunities Big or the Risks Big?

Yesterday, the A-share market fell sharply. Why is it able to rally strongly today? Hexun Investment Advisory’s Wen Taibin said the core reason is only one: a favorable development from the easing of regional conflict, combined with a surge in the Western and U.S. stock markets, and the A-shares are seeing an “April open-the-gate” rally. Then, is the April “open-the-gate” rally a bigger opportunity or a bigger risk?

Old Wen still believes the risk outweighs the opportunity. He gives three reasons, and finally shares a potential risk point for April. First, the good news: even though the A-shares market has risen, trading volume is only 2 trillion, which is still not enough compared with the 5-day average. So big capital still doesn’t recognize it, and it also won’t be sustained. Second, Old Wen still believes this is in the adjustment phase of wave four. And in terms of the chart pattern, it has broken below the neckline of an “m top.” The pressure zone is near 3950~4000 points. Today the gap has already been filled— the higher it rises, the more it becomes pressure. Third, from the perspective of sectors, today the focus is on low-position medical innovation drugs, as well as performance-good directions such as CPU and other computing-power-related themes. Other directions basically don’t have strong upward momentum, and there is no mainstream direction.

Overall, it can be said that the risks are still greater than the opportunities. What matters even more is this potential risk point in April: April is the earnings disclosure period. For pseudo-growth stocks and poor-performing stocks, you need to prevent a major blow-up; adopt a defensive strategy. Cut exposure on rallies— those with lighter positions can look for short-term trades in relatively lower-priced stocks with better fundamentals.