Today's market strength was somewhat beyond expectations. The first half hour after the morning opening was indeed not very impressive, with a slight dive. However, it suddenly strengthened near 10 o'clock, and after 10 o'clock, the index showed a red plate effect. Although the upward space was not very obvious, looking at the Shanghai Composite Index (SSE) on the time-sharing chart, it was mostly in a slightly rising state for most of the time, and I think this kind of trend is quite good.

Because last weekend, I mentioned that the index had been hovering for a bit too long in the past week, so the probability of a change in the market this week is quite high. Therefore, I thought that at the beginning of the week, we still need to be cautious about the index adjusting. As a result, I didn't expect the market to be so tenacious today. Not only did it not fall at the close, but in the last hour of the afternoon, there was a bit of a volume increase and a breakthrough upward.

Why did the volume increase and break through upward in the last hour? I think that for most of the day, the horizontal trend on the time-sharing chart was actually uncertain for most funds. No one knew whether there would be a dive after such a horizontal trend, because after 11:04 in the morning, the market showed such a situation. Whether it would be the same in the afternoon, no fund could be sure. So, what made the incremental funds enter the market in the last hour?

Micro-plate stocks hit a historical high, and nearly 300 stocks in the two markets hit the daily limit. What happened?

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From my understanding, most of the day, although the market seems very strong, the funds are still quite alert. It was not until near 14:00 in the afternoon that the market signals became a bit different.

What can be observed from the market is the effect of stock limits. By 14:00 in the afternoon, the number of stocks hitting the daily limit in the two markets reached 300, which should be the most recent time with the most stocks hitting the daily limit. This is just one aspect;

The second is that there are two major indices today that are surprising. One is the micro-plate stock index. I think everyone should be familiar with this index. In February of this year, it once fell from 3,400 points to 1,700 points in one breath. How big is this range? And when this wave of SSE hit 3,674 points, the micro-plate stock index was the only one among many broad-based indices to set a new high. Looking at today's index, it rose by nearly 4%, just 12 points away from setting a historical high;

Another is the CSI 2000 index. Although its trend is not as strong as the micro-plate stock index, the closing increase is also close to 3%, which is also quite strong among the broad-based indices today.

It is precisely because of the sharp rise in the micro-plate stock index and the upward breakthrough of the CSI 2000 index that there are nearly 300 stocks hitting the daily limit in the two markets. Generally speaking, the rise in micro-plate stocks mostly represents speculative behavior. Since the speculators dare to pull the daily limit at this time, they must have expectations for the market environment to be bullish in the future. In addition, the large-scale rise in micro-plate stocks also represents the activity of funds. As long as this atmosphere exists, the market will have a radiation effect of making money, and the probability of the market continuing to decline will be greatly increased.

This is why, from this perspective, the funds waiting outside the market gradually entered in the last hour. I think this is a positive signal for the market to improve.Remember one thing, every time the market picks up, it should start with the small and medium market value stocks, with these varieties creating upward space first, and then it's the time when value investing gradually takes root in people's hearts. When the logic of this market's overselling ends, that's when you should look at value without missing the rhythm.

So, how should the A-share market move next?

The reason for the initial judgment that the market would briefly move downward at the beginning of this week was mainly due to the divergence of technical indicators. However, one point that cannot be overlooked is the obvious increase in market transactions, which was very evident in today's market, with the total transaction amount of the two markets reaching 1.8 trillion yuan at the close, significantly larger than before. This indicates that there are indeed new funds entering the market. Under such circumstances, even a divergence-based rise should be recognized, and it seems that this bullish trend will continue for now.

As previously mentioned, there will be fluctuations in the process of this market's rise, but for holding positions, having firm confidence is the best and the only way to maximize profits.

Disclaimer: The content in this article is for reference only and does not constitute any investment advice or suggestions. The stock market is risky, and investment should be made with caution!