To The Moon

On October 28, the A-share market experienced a volatile rebound, with the ChiNext Index rising over 3%, while the Shenzhen Component Index and the STAR 50 Index both gained more than 2%.

Market hotspots rotated rapidly, with humanoid robot concept stocks surging, short drama concept stocks showing active performance, and innovative drug and CRO concept stocks climbing during intraday trading; on the downside, the food and beverage sector underwent volatile adjustment. Over 4,100 individual stocks across the entire market advanced. Total turnover across the Shanghai and Shenzhen markets reached 1.63 trillion yuan, an increase of 167.5 billion yuan compared to the previous trading day.

After all three major A-share indices opened higher collectively today, the dual-innovation indices staged a strong rebound. As of market close, the Shanghai Composite Index rose 0.91%, the Shenzhen Component Index gained 2.02%, and the ChiNext Index climbed 3.4%.

Most popular individual stocks delivered impressive performances. Lianxun Instruments returned to the thousand-yuan stock level, Unitree Robotics continued to rise over 8%, and Zhongji Innolight surged more than 10%. It is worth noting that Unitree Robotics has shown remarkably strong momentum recently, with cumulative gains exceeding 54% since October.

Although the A-share market has recently been affected by relatively weak sentiment, today all major indices staged a broad rally with increased trading volume, showing some signs of bottoming. Drawing on past experience, this round of index adjustment has been relatively thorough, and a phased rebound may be on the horizon, potentially giving rise to a considerable recovery rally.

It is worth noting that in the face of recent market adjustments, A-share companies are also conveying firm confidence through concrete actions. On the evening of October 27, the buyback and shareholding increase teams on the Shanghai and Shenzhen exchanges further expanded, with companies such as Sugon, Gree Electric Appliances, Dingtai High-Tech, and Jufei Optoelectronics disclosing relevant announcements. Wind data shows that since October, more than 120 companies have newly disclosed buyback or shareholding increase plans, with many industry chain leaders taking the lead in buybacks and shareholding increases, conveying confidence to the market with real capital.

Some brokerages believe that the A-share market has been undergoing volatile adjustment since July, with major broad-based indices experiencing phased pullbacks. This round of adjustment was mainly due to valuation pressure, representing a concentrated release of externally imported risks: repeated fluctuations in Federal Reserve rate hike expectations, rising U.S. Treasury yields suppressing global equity valuations, and escalating geopolitical tensions further impacting risk appetite.

However, the current market has already presented bottoming characteristics across multiple dimensions including valuation, positioning, and sentiment. First, valuation levels have fallen to low levels, and for growth tracks with clear industrial trends such as AI and accelerating profitability, the cost-effectiveness has become relatively prominent; second, index volatility has risen to high levels, possessing intrinsic momentum for mean reversion; third, alongside recent market adjustments, the trading crowding risk in popular sectors has decreased, and the market positioning structure continues to repair; fourth, from the perspective of large asset allocation, the risk premium of the CSI 300 Index has currently rebounded above its 3-year moving average, and from a large asset allocation standpoint, the cost-effectiveness of equity assets relative to bond assets has become significantly prominent; fifth, ETF funds have seen substantial net inflows, and historical experience shows that large net inflows into equity ETFs often correspond to phased market bottoms. The continued inflow of ETF funds can boost investor confidence, effectively alleviate market liquidity shocks, and provide solid support for the broader market.

So, from the perspective of valuation and performance, which direction should be chosen for oversold rebounds? Some analysts believe that after the short-term market rebound, sectors with strong performance, oversold conditions, and reasonable valuations will become important levers for obtaining excess returns. Some brokerages state that this round of market movement is more of a liquidity-shock-style phased adjustment rather than a fundamental reversal of industrial prosperity logic. As A-share listed companies enter the密集 third-quarter earnings disclosure window, high-prosperity directions with solid fundamental support are expected to stabilize and strengthen first. The technology sector is more sensitive to changes in liquidity and risk appetite, and after positioning structures have been fully digested, once the market stabilizes and rebounds, it is expected to become the most elastic lever. From the screened targets, they are mainly distributed across several branches: first, domestic computing power chips; second, PCB/optical chip segments in the overseas chain; third, semiconductor equipment leaders.