In recent days, a slew of favorable news has been released, signaling a coordinated effort by multiple departments to infuse long-term capital into the stock marketThis initiative reflects a strong commitment to stabilize the market and promotes the steady development of the A-share marketObserving the historical trends, it appears that A-shares are approaching a pivotal moment for recurrence, with the spring rally potentially on the horizonThe likelihood of experiencing fluctuations leading up to the holiday and then a surge post-holiday seems substantial.

Looking to history for guidance can reveal insights into potential future movementsA comparative analysis of the current bull market with the previous one shows remarkable similarities that suggest a historical pattern is re-emergingAfter the initial surge in the last bull market, a prolonged corrective phase ensuedThe rhythm of this current bull market, with its initial uptick followed by a corrective phase, mirrors that historical trend closely.

In the preceding bull market, following the second wave of correction, a third wave rally occurredThe current bull market seems poised for a similar trajectory after enduring its own corrective phaseHistorically, a fourth wave correction followed the third wave rally in the last bull market; similarly, the current market appears to be undergoing its fourth wave correction since the third wave rally commenced.

Additionally, after the fourth wave correction in the previous bull market, a fifth wave rally materializedAccordingly, if the current bull market's fourth wave concludes, a fifth wave rally is likely, aiming to challenge the 3700-point threshold once againNotably, since 1996, there have been no instances in the A-share bull market where a market cycle ended without fully completing three wavesIt is unlikely that this time will deviate from the established pattern unless a significant external force intervenes.

Historical data indicates that the fourth wave correction in the last bull market lasted 16 weeks

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Coincidentally, the current fourth wave correction has also reached week 16. The question arises: are we soon to witness the onset of the fifth wave rally? Indeed, this is a possibility; however, the pressures confronting this fifth wave seem more pronounced than those faced during the previous bull market's fifth wave, suggesting that the adjustment period could exceed 16 weeks to sufficiently accommodate unresolved market positions.

As for the duration of the fourth wave adjustment, it is unlikely to persist for much longerThe bow of the bull market is already drawn; it cannot remain indefinitely taut without releaseAs external conditions become clearer and beneficial domestic policies are enacted, the fifth wave of this bull market could easily commenceThe need for a substantial bull market to create social wealth and facilitate a recovery in consumption is pressing; thus, delaying it any further would be inadvisable.

Several significant policy announcements have recently been made that are expected to infuse additional capital into the marketThis indicates a clear intent and determination to foster market improvementWith the Two Sessions approaching and favorable policies likely to take effect, we may see an end to the adjustment period that began on October 8, 2024, and restart a fresh upward momentum.

Looking into 2025, it seems highly feasible that the Shanghai Composite Index could free itself from a long-standing cycle of fluctuations and aim to breach 3700 points, potentially even challenging the 4000-point mark, indicating significant medium-term opportunities ahead.

With long-term capital being drawn into the market from multiple channels, the securities sector is poised for a revivalThe pivotal question is whether now is the opportune time to invest in this sector.

The securities industry is notoriously cyclical, thriving in bull markets while languishing in bears

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Performance diminishes and stock prices plummet during bear markets, but dramatically increase during bull marketsTherefore, it is crucial for investors to skillfully navigate the ups and downs, strategically timing their entry at market lows and exits at highsThe best opportunities for acquiring securities occur at market bottoms during bear phases and in the early to mid-stages of bull markets.

Based on the extensive analysis previously conducted, the upcoming third wave rally of this bull market is anticipated to leverage the spring season effectively, making the securities sector a significant player in this potential resurgenceThe prospect of breaking past the 3700-point resistance is notably high, as bolstering sector sentiment is essential for surmounting extended periods of sideways movement.

Reviewing the monthly chart, the securities sector has undergone 114 months of consolidation, which translates to nearly 9.5 years of persistent box range tradingThis considerable period of shakeout will result in a powerful upside reaction once a vigorous rally beginsAn adage in trading states that the length of a consolidation foreshadows the intensity of the subsequent move, and hence, the likelihood of the securities sector breaking through the blue line is high.

Compared to its historical positioning, the current level of the securities sector does not seem overly high; in fact, when juxtaposed against previous lows, it's relatively positioned wellThe prudent strategy, therefore, incorporates a blend of gradual low-cost acquisitions alongside systematic weekly investments to capitalize on medium-term opportunities, laying the groundwork for the coming year's market movements.

However, amid this landscape, technology stock performance has shown signs of both recovery and retreatKey sectors like semiconductors, telecommunications, and computing power have experienced noticeable fluctuations

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Is the technology market still viable?

The fundamental logic underpinning technology shares remains intact; the rapid advancement of artificial intelligence continues unabated, signs of recovery in consumer electronics are emerging, and the semiconductor sector is witnessing a gradual improvementWith continued breakthroughs in core technologies and vast potential for domestic substitutes, combined with various thematic drivers, there remains ample opportunity for growth in the medium term in the technology domain.

Looking back at the previous bull market, like the performance trajectory of technology shares, can provide clarity on the current landscapeThe semiconductor sector, for instance, appreciated by four times, navigating through several wavesCurrently, it appears that only two major waves have transpired, marking a potential increase of about 100%. Hence, both in terms of time and price, the technology sector does not seem to be at a terminal pointNevertheless, given that prior gains may have been excessive, divergences among sectors are palpable and have yet to catalyze a cohesive bullish momentum.

The situation with the Science and Technology Innovation 50 index indicates weak oscillatory movements, potentially hinting at a downward breach of the white lineDuring this ongoing decline, there may be opportunities to reacquire previously sold stakes at higher prices.

Finally, the robotics sector encounters resistance at the blue line, making it unsuitable for pursuing upward momentum at presentHere, a slight reduction in exposure is warranted as preparations are made to buy back shares when it ostensibly revisits the 60-day moving averageAlthough no clear breakdown has occurred yet—the 10-day moving average remains intact—it is premature to conclude the end of the reboundMy strategy often leans toward left-side trading, leading me to engage in low-cost acquisitions during downturns while selling at peaks during ascents

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