Hexun Investment Advisor Gai Yinan: The Shanghai Composite Index is shrinking to extreme lows, are these the bottom prices?

The Shanghai Composite opened flat, then drifted lower, and came back to wash around the 3,880 level. And at this point, it completed an extreme volume situation. Basically, the volume was able to reach the prior swing low. The extreme volume was 710B (i.e., 710B). This means it is going to keep falling; whether it pulls back to 3,800, or whether it has to keep rising. According to Hexun investment advisor cover Guo Yinan, we also told our classmates during the live stream when we got going yesterday morning: we believe this already shows an extreme-volume signal. In other words, it’s when extreme volume appears at these major turning points.

On April 3, 2025, there was also an extreme low volume, and then it met this ultra-negative news about the trade issue—it fell. On November 17, 2025, the Asia-Pacific crisis also started to make an impact, and then it began to ease somewhat. Right? After November 17, it moved through a 17-day streak of consecutive green days. So extreme volume is not extreme price; it depends more on news.

As for the whole situation in the Middle East, we believe its impact on us is getting smaller and smaller. So I think there is about to be a major market-turning time node. It will appear in the very near future. If the news environment can trigger some easing, right? then I think it should turn upward.

Today, the power sector again saw another sell-off. This morning, many classmates wanted to bottom-fish. Nange also told the classmates that this level needs to be handled cautiously. Because on the day of a big bearish candle, if you don’t act, and there’s this kind of continued decline, don’t underestimate how short the sentiment is for this sector at this point. Since it accelerates down at this level, actually a rebound is very strong. You need to wait for it to have a “tightening” action that can slow it down, then you’ll see a rebound—where it presents a probe-rejection situation. Only after you see some stabilizing K-lines—again, it’s not just a single K-line; it’s a K-line combination.

If you don’t act on the day of a big bearish candle—not from the last big bearish candle, or from the middle one, but from the first day’s big bearish candle—then you can accurately avoid this round of the power sector’s pullback sell-off.

As for the power sector, we are still observing whether there is a chance to bottom-fish. Even if this wave can’t form a “main” strong upward move, it can still have some strong rebound. The sell-off was a sharp, fast, big-magnitude drop—right? And that rebound is also very strong.

As for brokerages: today they’re making a new low again. Brother also told the classmates this morning: in this position, brokerages are forcing you out of the market. After falling for eight or seven or eight months consecutively, it has already pushed back to the level of January 2025. Just waiting for a decent rebound isn’t hard. What’s more lacking now is confidence.

(Editor: Wang Gang HF004)

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