Tech Stocks Poised to Fire First Shot of Counterattack

On Monday, the three major indices opened with a sharp decline, and individual stocks mostly fell, leading to a temporarily subdued market sentiment. However, the market did not continue to weaken throughout the day. Driven by an early rally in Hong Kong stocks, the A-share market rebounded in the afternoon after dipping to the bottom. The Shenzhen Component Index closed in the green, and the ChiNext Index rose by over 1%. By the close, more than 2,800 stocks in the market were up, with a median gain/loss of 0.14%. Overall, the market performed better than expected, demonstrating resilience.

Two major signals worth noting:

1. Hong Kong stocks rebounded strongly, with the Hang Seng Index up 1.45% and the Hang Seng Tech Index up 2.69%, as large tech stocks collectively recovered.

2. The Shanghai Composite Index quickly recovered after three dips near 4050 on March 4, 9, and yesterday, forming a typical “three-point bottom” pattern, indicating strong support below and limited downside potential.

Based on the current market situation, most sectors are already brewing a rebound. Many high-quality leading stocks have been mistakenly sold off, creating potential for medium-term low-cost accumulation. The Hang Seng Tech Index is a prime example, and many tech stocks in A-shares are similar. Patience is needed to get through the bottoming phase.

Overall, as market recovery sentiment begins to rise, funds are already testing offensive sectors. Semiconductors, as a leading sector, should be closely watched. Once they resonate with the index, a wave of rebound could follow.

Money Eye