Founder: The market bottoming area is gradually becoming clear; focus on three aspects of allocation opportunities.

Founder released a research report stating that, affected by the loosening of the AI narrative and liquidity shocks, tech stocks accelerated their adjustment this week. Driven by a significant increase in broad-based ETF volumes, signs of stabilization have begun to emerge. The firm believes that after the market has undergone sufficient adjustment, the bottoming area is gradually becoming clear, and the timing for positioning for oversold rebounds is now mature. Attention should be paid to three aspects of allocation opportunities. First is the oversold rebound in technology; after substantial corrections, the sector's allocation value has increased significantly. Second is to emphasize the allocation value of domestic demand and pro-cyclical sectors, including some consumer goods. Finally is non-bank financials, which respond most directly to monetary policy changes, have good earnings-valuation alignment, and can stabilize the index. Founder's main views are as follows: Market trend assessment: The market accelerated its adjustment this week, mainly affected by the loosening of the AI narrative and liquidity shocks, with tech stocks bearing the brunt. In the latter half of the week, as the Shanghai Composite Index adjusted to key levels not seen since the "924 rally," driven by a significant increase in broad-based ETF volumes, signs of stabilization began to emerge. We believe that after the market has undergone sufficient adjustment, the bottoming area is gradually becoming clear, and the timing for positioning for oversold rebounds is now mature. In terms of the magnitude of the market adjustment, the Wind All A Index has retraced more than 20% from its mid-May high, with valuations returning to around 20x. The CSI 300 Index has fallen for 10 consecutive weeks, exceeding the 9-week losing streak at the end of 2011, indicating that both the duration and magnitude of the market adjustment have been relatively sufficient. Starting in late October, important domestic and overseas events will occur successively, including the domestic policy-related Financial Street Holdings Forum and the Fifth Plenary Session, A-share fund holdings and third-quarter earnings reports, as well as the Federal Reserve's FOMC meeting and US corporate earnings overseas. These events will help ease current relatively pessimistic expectations regarding fundamentals, micro-liquidity, and the AI narrative. In terms of style, large-cap style, due to its low-valuation attributes and the arrival of the policy support window, is relatively favored during market stabilization and the early stages of a rebound. Allocation strategy recommendations: Look to technology for market stabilization, and to domestic demand for trend formation. Focus on three aspects of allocation opportunities. First, the oversold rebound in technology: after entering late October, technology catalysts will increase, the AI industry trend and prosperity remain solid, and allocation value has increased significantly after the recent sharp correction. Pay attention to changes in public fund holdings to be published in October; within tech stocks, tilt toward segments that can raise prices, expand volumes, and have new technological breakthroughs. Second, emphasize the allocation value of domestic demand and pro-cyclical sectors, including the real estate and infrastructure chain as well as some consumer goods. Third, non-bank financials, which respond most directly to monetary policy changes, have good earnings-valuation alignment, and can stabilize the index.