Today someone asked me what to do if the SSE Composite 3800 happens. Actually, when it was ranging around 4000, I already felt that for this cycle, it would need to go down to 3400 in order to be a good bottom to pick up.
Playing the A-shares market big shouldn’t be analyzed purely from industries, technology, or K-line charts. The previous run from 2600 up to 4200 was already giving plenty of face.
Now the whole world is slipping down from the peak, and it’s definitely unreasonable for A-shares to put on a solo show. Why can’t it be more like Hong Kong stocks, a bit of “red in the middle”? The reason is something engraved in the bones of the Chinese people—to keep your edge hidden.
If you want to play big A, you should appropriately use Confucian thinking to play.
If you analyze only from the K-line, the 3800 level is the right shoulder of a head-and-shoulders pattern. The support under it is 3400. Holding positions—especially any selling—doesn’t seem suitable right now. You can only wait to exit if it breaks down, or exit again on a rebound; then, after it reaches 3400, you can consider taking it back.
What do you all think?