The CSI 300 gained 0.84% on higher and about average volume and remains in an Uptrend
Under Pressure with the number of distribution days falling to six from eight. The index retook its
50-DMA (~4,882, -0.4%) with next resistance at the 100-DMA (~4,917, +0.3%) and immediate
support at November 10’s low (4,754, -3.0%). The omicron variant rattled market sentiment
amid re-rising domestic infections. Official manufacturing PMI improved to 50.1 (consensus 49.7)
from 49.2. COVID-testing stocks rallied with pared gains. Liquor stocks were strong as price hikes
brought consumer-related stocks back into focus. Travel-related stocks were hit by re-emerging virus
concerns. Solar companies were pressed by price war worries following price cuts from a silicon
wafer leader. The market is volatile and headline-sensitive with strong sector rotation amid COVID
uncertainties. We are patiently monitoring policy signals and COVID updates before the index
reveals clearer signs of direction. We recommend investors stay disciplined and selective and avoid
chasing highs.
