comtec_stock
Like many PRC-based firms, Hong Kong-listed Comtec Solar has been trending up with the recent Shanghai Composite rise

Translated by Andrew Vanburen from a Chinese-language blog piece in Sinafinance

MARKET SENTIMENT can get bearish in a hurry when the bourse fails to have an upside week.

And the same can happen when too many positive weeks start accumulating, and pessimists start worrying that it's time to let some air out of the tires before they blow.

In other words, just when we were enjoying a sustained run on the A-share markets on the Mainland, some malcontented miscreant market-watchers want to rain on our parade by deconstructing the dais.

But it’s not all gloom and doom these brokerage bigshots have to offer.

West Securities says that in looking at the current uptrend in A shares, it would seem that the ceiling is drawing near as the two most recent mini-bulls added around 8.3% and 10%, respectively.

This current upswing has already accumulated over 11%. So investors should expect the next nine days to see the Index stuck within a narrow range as it searches the landscape for more drivers, unless there is more good news from Beijing.

Dongwu Securities says that since the market stared into the abyss a few months ago, we have seen a slow but sure rise in the Shanghai Composite. In fact, the main board has enjoyed a run of four consecutive gaining weeks, with this currently being week No. 5.

The brokerage feels that with some of the unappreciated counters getting more attention from the pool of laggards, there is still the potential for further rebounds.

Galaxy Securities said the current gyrations in the benchmark Shanghai Composite Index should be likened more to a corkscrew than a choppy sea. The ride may be rough, with a lot of twists and turns, but at the end of the day the general direction is consistently upwards. The only worry should be if the corkscrew gets upturned and the downward spiral begins – or if the corkscrew isn’t long enough.

sc2_16
The Shanghai Composite's three-month performance


At the same time, investors cannot ignore the rocking boat along the current run, and should be wary of any signs of an approaching waterfall. These could be on the policy front or – more likely at this time of the year – could emanate from the earnings barrage as reporting season for 2011 is fast approaching, which makes the second quarter one of the most potentially volatile.

One excellent warning buoy for approaching eddies or, worse yet – waterfalls – is a sudden spike or plummet in daily trading turnover. And as for trading volume for individual counters, it is important to remember that too much daily interest – or a sudden sense of being ignored by investors – is a sure sign of trouble on the horizon.

Therefore, it is just as important for shareholders to monitor the “rhythm” of shareholder interest in their counter as it is to monitor the price movements.

Jinzheng Consulting says that the benchmark Index (which tracks A- and B-shares in both Shanghai and Shenzhen) is still trending above its 60-day moving average which should provide sustained upside support and help maintain a generally positive sentiment for investors.

The consultancy would closely monitor any possible macroeconomic policy shifts from Beijing – in the form of altered reserve requirement ratio or prime rate moves – especially after the surprising inflation figures from last month.

See also:

Just As In Gambling, Self-Control Equals To Research For Investors

ALEX WONG: Don’t Let Gyrations Make Gamblers Of Us

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings3.320-
Avi-Tech Electronics0.245-0.010
Best World1.700-0.010
Broadway Ind0.0820.001
China Sunsine0.4050.005
ComfortDelGro1.330-0.020
Delfi Limited1.140-0.040
Food Empire1.100-0.010
Fortress Minerals0.290-0.015
Geo Energy Res0.280-0.005
GSS Energy0.029-
Hong Leong Finance2.470-0.010
Hongkong Land (USD)3.240-0.030
InnoTek0.3900.005
ISDN Holdings0.335-0.010
ISOTeam0.040-0.001
IX Biopharma0.042-0.002
Jiutian Chemical0.026-0.002
KSH Holdings0.285-
Leader Env0.0550.003
Medtecs Intl0.1390.002
Nordic Group0.400-0.015
Oxley Holdings0.1010.002
REX International0.1690.002
Riverstone0.630-
Sinostar PEC0.135-
Southern Alliance Mining0.675-
Straco Corp.0.4900.015
Sunpower Group0.2400.010
The Trendlines0.0920.008
Totm Technologies0.0370.001
Uni-Asia Group0.9400.040
Wilmar Intl3.620-0.070
Yangzijiang Shipbldg1.470-
 

We have 1868 guests and no members online

rss_2 NextInsight - Latest News