cartierpokerset| BOCOM International: The rebound of Hong Kong stocks will continue, but attention should be paid to the disturbance of non-fundamental factors on the market

BoCom International issued a report that the recent rally in Hong Kong stocks has been gratifying, Hong Kong stocks have entered a technical bull market, echoing the bank in March to judge that the rebound will continue at least in the next few months. The direction of this rebound is also basically confirmed with the report's "structural perspective: hang Seng Technology Index + AI industrial chain + commodities, rebound perspective real estate industry chain + mid-cap stocks". The bank believes that the rebound in Hong Kong stocks will continue, but we should pay attention to the disturbance to the market caused by non-fundamental factors.

The bank explained that the higher-than-expected shift in real estate policy supported by macro policy will rebuild the positive cycle of market expectations.CartierpokersetFrom the meso point of view, the profit expectation of China's equity market shows signs of bottoming out; from the perspective of capital flow, the room for return is still obvious; technically, technical indicators show that the upward cycle of the market is not yet over; the valuation is low and the risk premium is high. High performance-to-price ratio will continue to attract funds to enter the market.

BoCom International refers to that from the perspective of capital flow, the room for return is still obvious, and the turnover of Hong Kong stocks has also shown significant volume in the past two months, exceeding the 12-month moving average, while southward funds continue the trend of net buying, and the cumulative net buying rate has also accelerated significantly since February.

On the technical side, the technical indicators show that the upward cycle of the market has not yet come to an end, and the bank calculates the proportion of stocks in the Hang Seng Composite Index whose share prices are higher than the 250-day moving average, which is a good guide for judging the large stage of the market. It is often necessary to guard against a correction when the ratio is above 70%, and when the ratio is below 10%, it usually corresponds to a solid bottom of the market.

The bank's calculations show that the current reading has been gradually repaired since it bottomed out in late January 2024 and is still in the process of climbing, and the current reading level is not high, indicating that the upward cycle of the market is not yet over.