The ChiNext Index is building a double bottom pattern
2024-08-24
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The A-share market continued to fall this week, with all major indexes closing in the negative. Small-cap stocks fell the most, with the CSI 2000 Index falling more than 4% this week.The weakest index in the Shanghai and Shenzhen stock markets is the ChiNext Index, which also shows a double bottom pattern. This double bottom is very obvious in the daily, weekly and monthly lines. Of course, whether this double bottom can be established depends on the future trend, especially the trend in September.。
Major indices continue to fall
Shanghai Composite IndexIt broke through the 2,900 point mark on Monday, reaching a high of 2,905.15 points, but turned downward again on Tuesday, with a drop of 0.93% on Tuesday. It hovered at a low for the next few days, but the overall decline was not large. It fell to a low of 2,839.34 points on Friday, almost exactly the same as the 2,839.39 points last week. After hitting the bottom on Friday, it rebounded and finally closed at 2,854.37 points, down 0.87% this week. The weekly closing position is similar to the previous week's closing position.
Shanghai Composite Index Weekly K-line Chart
The Shenzhen Stock Exchange was weak, hitting a recent low.Shenzhen Component IndexThe Shenzhen Component Index closed at 8181.92 points on Friday, down 2.01% this week, with five consecutive negative weekly K-lines. The Shenzhen Component Index closed at a new low since February 2 this week, and the gap with this year's lowest weekly closing level of 8055.77 points on February 2 is very small.
Shenzhen Component Index Weekly K-line Chart
ChiNext IndexIt is the worst performing index, closing at 1546.9 points on Friday, down 2.8% this week, with 5 consecutive negative weekly K-lines. This week's closing is lower than the weekly closing of 1550.37 points set on February 2 this year, which means that this week's closing hit a new low for this year and also a new low for the past five years. However, the two weekly closing positions are basically the same.
ChiNext Index Weekly K-line Chart
Small-cap stocks were the hardest hit this week
This week, several indexes hit new lows.For example, the Beijing Stock Exchange 50 Index hit a low of 647.36 points on Friday, which is a record low since the index was established.The Beijing Stock Exchange 50 Index closed at 648.39 points this week, down 4.05% this week, with three consecutive negative weekly K-lines. This week's closing price is also a new historical low for the weekly closing.
The Science and Technology Innovation 50 Index closed at 685.76 points on Friday, down 2.76% this week.Although this week did not hit a new historical low, the weekly closing position was only 12 points higher than this year's historical lowest weekly closing of 673.41 points (February 2 this year), hitting a new low in six months and the second lowest weekly closing position in history.
Judging from these indices,The biggest decliners this week were the Beijing Stock Exchange 50 Index, which fell by more than 3%, and the ChiNext Index and the Science and Technology Innovation 50 Index, which fell by more than 2%.These sectors are dominated by small-cap stocks, and the large decline in the index indicates that small-cap stocks were the main losers this week.
This is even more evident in the CSI 2000 Index, which fell 4.65% this week, the largest decline among the CSI size indexes. The CSI 2000 Index closed at 1,707 points this week, lower than the weekly closing price on February 8 this year, and the weekly closing price has hit a new low this year and a new low in the past five years.
Relatively speaking, the Shanghai Composite Index, which is dominated by large-cap stocks, was resilient and saw a smaller drop. Similarly, the CSI 100 Index, which is dominated by large-cap stocks, only fell slightly by 0.09% this week.
CSI 300 Index Weekly K-line Chart
Whether the double bottom can be established remains to be seen
Among the major indexes, the ChiNext Index showed the weakest trend, and the ChiNext Index showed a double bottom pattern. First, let's look at the daily K-line. On Thursday, the ChiNext Index closed at 1546.63 points, slightly lower than the lowest daily closing point of 1550.37 points on February 2 this year, but basically the same. It can be said that these two low points formed a double bottom pattern.
From the weekly K-line, this week's closing position is almost the same as the weekly closing position on February 2, half a year apart, and the weekly line presents a double bottom pattern.It also depends on the trend in the next few weeks. If there is no further decline and a rebound, then a double bottom can be established; if it continues to fall sharply and continuously hits new lows, a double bottom will be difficult to establish.。
Looking at the monthly K-line, the lowest monthly closing price was 1573.37 points in January. This week's closing price was slightly lower than this position. There is still one week left in August.If the closing price next week is still near this position, then the monthly K-line will also form a double bottom pattern.。
It is obvious that the current trend of the ChiNext Index is building a double bottom pattern. Of course, we cannot say that this double bottom has been clearly established now. We still have to wait and see the performance next week and September. If there can be a significant rebound in September, the double bottom will be established.
Therefore, it is necessary to observe the future trend of the market, especially the trend of the ChiNext.
Gold Coast Jobsroom
Author | Lian Jianming
Editor | Lu Jiahui
