Author: Sandeeep N

The CSI 300 fell 7.65% on significantly higher volume. The market was shifted to an Uptrend Under Pressure with the number of distribution days decreasing to six. The index trended downward and breached below its 21- and 50-DMA (5,364, +0.5%), with next support at the 100-DMA (5,104, -4.4%). Market sentiment was dampened by rising U.S. 10-year Treasury note yields and the pullback of the U.S. stock market. Real Estate surged due to the centralized land supply policy, which is expected to lower land prices. Utility and Energy outperformed the market. High-valuation sectors Consumer Staple, Health Care, and Technology retreated sharply. The correction of expensive large-cap stocks has been the main theme recently. The index is facing downside risk due to the loss of key support at the 50-DMA and fears of policy tightening. We recommend a cautious and selective approach and advise investors to focus on stocks with both solid fundamentals and strong technical profiles.