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The broad rally on November 4, with a wave of stocks hitting both the 10% and 20% daily limit, brought joy to those already in the market and anxiety to those on the sidelines. In reality, without enduring the prior decline, it is very difficult to precisely capture a surge that comes without warning. On November 4, the STAR Composite Index jumped nearly 10%, while the ChiNext Index rose more than 6%. The market once again proved that patience eventually brings a turning point.
The main force driving this rebound has been technology stocks that had been persistently oversold. On November 5, the index pushed higher again, and although it pulled back, many individual stocks have already established independent low-level right-side reversals, such as Espressif Systems (Shanghai) Co Ltd (SSE: 688018).
After the big rally, these stocks continue to edge up and have taken the lead in forming low-level reversals
On November 4 the market surged, and on November 5 it briefly rallied before closing with modest gains, yet the market has clearly shown that it can no longer fall further. Some say a single day of gains is hardly cause for celebration, as there is still no end in sight for recovering the losses from July and October. But from another perspective, bullish forces after the oversold condition have begun to multiply continuously. Some friends had already given a clear assessment in previous comments that, judging by the declines on both the weekly and monthly charts, the lowest point of this correction would be seen this week.
So what is the nature of this rebound? Can it continue? Some objective data may provide answers. On November 4, the day of the market surge, main funds began to enter aggressively, with net inflows reaching 25.3 billion yuan, reversing the previous consecutive outflows. On the prior day, November 3, main funds saw net outflows of nearly 40 billion yuan. Multiple other data points also confirmed the gradual recovery of sentiment. On November 4, turnover returned to 2 trillion yuan, and the number of stocks hitting the daily limit exceeded one hundred again, reaching 123. On November 5, turnover continued to exceed 2 trillion yuan.
The overall market inflection point and positive signals are clear, but individual stock opportunities have begun to shift from the broad rally on November 4 to the structural gains on November 5. The mode of waiting passively for a rebound must now shift to selectively identifying individual stock opportunities. Some stocks have returned to declines, such as Lianxun Instruments, which posted a bullish candle that engulfed the previous bearish candle on November 4, but returned to correction and hit a new low on November 5.
Each round of sector rotation is similar, with a group of stocks stabilizing first and then launching a rebound. Recently, some stocks have continued to rise and have moved ahead of the market to stage a phased rebound. Typical examples include Jiangfeng Electronics, Aojie Technology, Hengxuan Technology, Sidike, Espressif Systems, Orbbec, Zhangqu Technology, Kanglong Chenghua, Juxin Technology, Autowell, Liyuanheng, and Jiejia Weichuang. Among them, some stabilized at low levels and rebounded, breaking through the descending channel line, such as Aojie Technology. Others confirmed right-side breakouts or even hit new highs, such as Espressif Systems, which has accumulated a gain of 60% since confirming its inflection point on September 16.
In the current market, some funds have already begun left-side positioning, while others are still waiting for the bottom to be confirmed and the reversal trend to become clear. But one fact is that many stocks, including Jiangfeng Electronics, Aojie Technology and Espressif Systems, have already started from the bottom. However, the reversal of individual stocks will not happen overnight; they may go through stabilization, rebound, reversal, further consolidation and then another breakout. Before the share prices of Aojie Technology and Espressif Systems started moving, main funds had already entered from low levels, and they also displayed some different bottoming patterns.
Main funds flow heavily into these sectors, with semiconductors leading
Behind the big rally on November 4 and the continued modest gains on November 5 is the resonance of multiple major positive factors for A-shares after a prolonged oversold condition. The policy bottom and market bottom that everyone has been discussing have begun to work in tandem. On the policy side, the State Council's financial work report recently stated support for Central Huijin to play a quasi-stabilization fund role in maintaining the stable operation of stock, bond and foreign exchange markets. In addition, the central bank conducted its third Securities, Funds and Insurance companies Swap Facility (SFISF) operation, totaling 100 billion yuan. The stock buyback and increase-holding relending policy has also shifted from a phased arrangement to a long-term institutional arrangement, with the relending rate cut from 1.25% to 1%. Policy positives have played a lever-like amplifying effect in activating market sentiment.
At the same time, certain overseas factors have also added bullish sentiment to fund positioning. For example, in the U.S. midterm elections, the Democratic Party winning key seats became an important turning point, as Democrats will push legislation to block Trump's tariff policies and end the Iran conflict. Several heavy boulders suppressing market risk appetite are facing variables. With the overall market recovering, the key flow direction of funds is becoming the core variable for the next opportunity.
Statistics show that on November 4, the day of the market surge, sectors such as semiconductors, communication equipment, components, minor metals and consumer electronics saw relatively high main fund net inflows, all exceeding 20 billion yuan. Semiconductors had the highest net inflow, reaching 56.8 billion yuan. At the individual stock level, within semiconductors, Tongfu Microelectronics, Naura Technology, Junzheng Shares, Changchuan Technology, Changxin Technology and Jiangfeng Electronics saw relatively high main fund net inflows, all exceeding 400 million yuan.
Looking further, many stocks continued to rise on November 5 after main funds entered and share prices surged on November 4. For example, Tongfu Microelectronics saw main fund net inflows of 860 million yuan on November 4, with a main fund net inflow ratio of 20.61%. After hitting the 10% daily limit on November 4, it briefly hit the limit again on November 5 before opening. Xiandao Jidian posted two consecutive 10% daily limit gains. On November 4 and November 5, all semiconductor sub-sectors showed strong momentum, with semiconductor equipment surging more than 20%, semiconductor materials up 16%, and semiconductor packaging and testing up 13%.
Behind the semiconductor sector's early rebound are multiple positive catalysts including oversold repair (semiconductor equipment fell more than 50% from July 10 to November 3), policy support, and industry cycle drivers. For example, the policy-side reduction of the relending rate for stock buybacks and increase-holdings will further lower the financing costs for semiconductor company buybacks. The landing of the third batch of 100-billion-yuan swap facility operations will further increase liquidity for institutions positioning in hard technology. In addition, on the industry side, according to the latest data from the World Semiconductor Trade Statistics (WSTS), global semiconductor sales reached 517.7 billion U.S. dollars in the third quarter of 2026, up 24.1% quarter on quarter.
In conclusion, the seesaw行情 between technology stocks represented by semiconductors and dividend stocks represented by banks has reversed, with the former starting up and the latter quickly fading. Behind this is not only a reflection of improved risk appetite, but also a style shift in the market from pursuing certainty in dividends to seeking high elasticity within the industry cycle. After the cautious period, funds have become greedy again.
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