The CSI 300 ended flat with a modest gain of 0.03% on lighter and below average volume and
remains in an Uptrend Under Pressure with eight distribution days. The index continued moving
sideways around its 50-DMA (~4,894, +0.1%) with key resistance at the 100-DMA (~4,946,
+1.1%). Immediate support lies at November 10’s low (4,754, -2.8%) followed by July 28’s low
(~4,664, -4.6%). October saw improving industry output (+3.5% y/y, consensus 3.2%) and recovering
retail sales (+4.9% y/y, consensus 3.4%), though fixed asset investment missed expectations
(+6.1% y/y, consensus 6.3%). Food & beverage led gains on price hike expectations. Health care
rebounded on better-than-expected drug price negotiations. Lithium companies outperformed on
strong lithium prices backed by EV demand, while auto companies revealed weaknesses. Agricultural
stocks retreated from an inflation expectations-fueled rally in previous weeks. Real estate lagged
on weakening sales and property development investment but bounced Friday. Semiconductors also
posted weekly losses. The index faces strong resistance at its 100-DMA, but key support at previous
lows still hold. We will stay patient amid high volatility, strong rotation, and a rising distribution
day count. Investors should be cautious, disciplined, and selective and avoid chasing highs.
