To The Moon

Event: On October 28, the A-share market rebounded with heavy volume, and the technology growth sector recovered across the board.

As of the close, the Shanghai Composite Index stood at 3,681.47 points, up 0.91%; the Shenzhen Component Index closed at 11,473.18 points, up 2.02%; the ChiNext Index reached 2,634.76 points, up 3.40%; the STAR 50 Index rose 2.45%, the Beijing Stock Exchange 50 Index gained 1.63%, and the CSI 300 Index advanced 0.85%.

More than 4,100 stocks across the market posted gains, with 70 hitting the daily limit-up and 6 hitting the daily limit-down across the Shanghai and Shenzhen markets, signaling a notable recovery in profit-making effect. Combined turnover of the two markets reached 1.64 trillion yuan, an increase of 167.5 billion yuan from the previous trading day, indicating a clear improvement in the price-volume coordination.

Market Review: At the sector level, a typical pattern of oversold growth stocks staging a recovery emerged. The humanoid robotics concept triggered a wave of limit-up moves, computing power hardware rebounded collectively, and sectors such as CPO, PCB, and memory chips led the gains, with the communications and information technology indices rising 3.49% and 3.31% respectively; innovative drugs and CRO concepts moved higher during intraday trading.

On the downside, the food and beverage sector underwent volatile adjustments, the large financial and dividend-oriented sectors weakened, and the banking sector that had led against the trend the previous day saw capital outflows. The earlier high-low rotation of "tech sell-off, value defense" has reversed.

We believe that today's volume-driven rebound is the result of a confluence of recovering external sentiment, verified industry prosperity, policy catalysts, and chip rebalancing.

First, overnight US tech stocks resumed their upward trend, with the Nasdaq rising 1.18% and the Philadelphia Semiconductor Index surging 3.6%. Broadcom completed a $63 billion AI chip financing arrangement, and Nvidia announced plans to invest $3 billion in Meta and expand cooperation on next-generation computing platforms. Capital operations across the global AI industry chain continue to heat up, directly boosting sentiment in A-share computing power hardware.

Second, industry prosperity has been validated by hard data. SK Hynix's third-quarter revenue exceeded 100 trillion won for the first time, with operating profit growing 632% year-on-year to a record high. The company expects the memory supply-demand imbalance to persist until 2030. A-share computing power hardware companies have densely delivered their third-quarter reports, with many companies posting several-fold year-on-year growth in net profit, significantly enhancing earnings visibility in the memory and optical module segments.

Third, policy and industry events have provided dense catalysts. Shanghai issued a new-generation intelligent manufacturing action plan to support breakthroughs in humanoid robot innovation, foundational large model companies are密集 entering embodied intelligence, and the robotics industry is shifting toward mass-production expectation-driven momentum.

Fourth, capital and chip structure have improved. Third-quarter public fund holdings show reduced TMT allocation, with increased allocation to pharmaceuticals and banking. Equity ETFs continue to see net inflows, institutional chip rebalancing has begun ahead of schedule, and risk appetite has shown signs of recovery.

Looking ahead, we believe the quality of the rebound depends on three observation points: whether trading volume can stabilize above 1.6 trillion yuan, whether the main theme can spread from concept speculation to earnings realization, and whether external pricing can settle smoothly.

This week is a "super central bank week." The Federal Reserve's decision will be announced in the early hours of tomorrow Beijing time. According to CME's "FedWatch," the probability of keeping rates unchanged this week is 92.8%, and the probability of a 25 basis point rate hike in December is 77.7%. ECB and BOJ decisions will follow in quick succession. Oil prices have fallen below $100, temporarily easing inflation concerns, but uncertainty over the policy path remains.

Allocation Recommendations: Structurally, we recommend preparing on two fronts. On one hand, focus on computing power hardware, memory, and humanoid robotics sectors with high earnings realization and clear industry trends, paying attention to earnings verification during the dense financial reporting period. On the other hand, use low-valuation sectors such as consumer and financial stocks as portfolio stabilizers to hedge against external policy and market volatility.

MACD golden cross signals have formed, and these stocks are performing well!