This week, the market continued its rebound but with increased two-way volatility. Looking ahead, given the substantial gains in Q3 this year and the ongoing recovery of previously strong stocks after pullbacks—coupled with the absence of a dominant market narrative or leading sectors—we expect range-bound fluctuations to persist.
**Investment Strategy**: Adopting a "wait-and-see" approach amid the redundant phase, investors should avoid chasing rallies or panic-selling to prevent cost escalation. Instead, set entry targets based on key support levels of broad-based indices (e.g., the Shanghai Composite’s September 4 low or prior gaps, or the Hang Seng Tech Index’s recent lows/annual moving average) and accumulate positions gradually.
**Sector & Stock Picks**: Focus on lagging but expanding sectors like brokerages. Short-term opportunities may arise in home appliances, which historically perform well in December. Monitor undervalued stocks in healthcare, consumer goods, and AI applications, as well as stagnant yet technically supported names above annual moving averages.
**Weekly Market Recap (Dec 1–5, 2025)**: 1. **Indices**: Broad-based gains led by the ChiNext Index. 2. **Sectors**: Metals and hard tech rose; consumer and soft tech retreated. 3. **Sentiment**: Trading volume dipped slightly in Shanghai/Shenzhen; futures mostly traded at discounts. 4. **Liquidity**: Margin balances edged up with higher leveraged buying, while equity ETFs saw net outflows. 5. **Quant Signals**: ChiNext valuations remain relatively low; downside risk models indicate neutral levels.
**Key Catalysts**: - French President Macron’s visit to China. - The Trump administration’s push to accelerate robotics development. - China’s financial regulator adjusted insurers’ risk factor requirements.
**Outlook**: Range-bound trading is likely to continue, with the Shanghai Composite and ChiNext oscillating in the "upper range" (facing resistance), while the STAR 50 and Hang Seng Tech Index test "lower range" support. Brokerages, a previously underperforming "pivot sector," rallied moderately this week, but sustainability remains unclear.
**Risks**: Slower-than-expected domestic economic recovery; geopolitical uncertainties.
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