On June 10, the A-share market experienced a significant decline. What is the driving force behind this incident? What impact will it have on future market trends? This question has attracted close attention from many investors.
Analysis of the reasons for diving
On June 10, Liu Changsong, Hexun Investment Consulting, conducted a detailed analysis of the sharp decline in the A-share market. He pointed out that the significant decline in stock prices this time is the consequence of the interaction between the two factors of information and technical aspects at specific time nodes. At the information level, the decline in the A-share market echoes the performance of other stock markets in the Asia-Pacific region. For example, the Nikkei 225 index also fell, but the specific information that caused the decline is not yet clear. In technical analysis, the decline is particularly important.
The technical cycle reveals
From a technical analysis perspective, the top divergence phenomenon at the daily level is usually accompanied by signals that attract investors to buy. During the trading activities of the day, although the index remained above 3400 points, the period of time it lasted was particularly critical. Since the price of 3040 points rebounded, it has been 43 trading days so far. This period is completely consistent with the 43 trading day cycles spanned by the low of 3140 points hit on January 13, 2025 to the adjustment phase on March 20 of the same year. This phenomenon is undoubtedly worthy of special attention.
Adjustment structure analysis
Since the pullback at 3674 points, the market has undergone four comprehensive adjustments at the daily level, and its pace of rise and fall is characterized by slow first and then rapid. During these four adjustments, each round of adjustments is marked by four representative negative lines. Only after the indicator is repaired will the market gradually enter a moderate rise. Although historical trends will not simply reproduce, similar adjustment patterns are still of significant value for analyzing the current market trend.
Observation of disc features
Analyzing the market trend, if the sharp decline around 3674 points can be effectively avoided, investors will face relatively little risks. When the market structure is adjusted, the market will generally show an upward correction trend after four representative K-lines. In this process, we need to closely track the dynamics of repairing these iconic K-lines and daily-level indicators, rather than focusing on specific price points, because the points of the Shanghai Composite Index have already deviated to a certain extent.
Support judgment method
In terms of evaluating support strength, the performance of the Shenzhen index is more significant among similar indexes. This judgment is mainly based on features such as M head and neck line gap or ABC wave morphology. From the perspective of ultra-short-term trends, there is a need for adjustment in the 60-minute cycle indicator, so after the large-volume negative line appears, it is not advisable to rush to chase the positive line in the adjustment stage to avoid unnecessary losses.
Double Innovation Index
In the Double Innovation Index sector, performance failed to meet expectations. The ChiNext fell by 1.17% on the day, and the Science and Technology Innovation 50 Index fell by 1.47%, not only offsetting the previous day’s increase, but also accompanied by an increase in trading volume. This situation reflects the obvious pressure on the market to sell. Investors have been warned before, reminding them to pay attention to the risk of inducing multiple risks, and recommending to operate with caution. It is currently impossible to determine whether any investors have successfully avoided the risks.
The market will inevitably face new development opportunities, but the premise of this change is that we need to accurately identify key trends with significant growth potential. At present, an urgent problem to be solved has emerged, that is, everyone is generally concerned about the duration of this market adjustment. Here, we sincerely invite you to share your views in the comment area, and please do not forget to like and forward this article.
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